Why Apartments are Still a Great Strategy for Investors Print
Written by David Lindahl   
Monday, 01 March 2010 19:37

Apartment Buildings are still a Top Choice for Investors

With the chill beginning to lift ever so slightly from the real estate market, investors are beginning to emerge from hiding. There are many opportunities out there. Banks have been foreclosing on properties at an unprecedented rate and vacancies in some municipalities continue to rise. For some would-be real estate speculators, the lure of these vacant homes is tough to resist. After all, a house that was selling for half a million dollars five years ago might be on the block for under two hundred now.

In severely depressed areas, hard hit by manufacturing shut downs, homes can be had for ten thousand dollars or less; some are being sold for the amount owing in property taxes! Buying one of these houses can be a risky business, though. Some have been severely damaged by former owners or even squatters, while homes that have sat vacant for months may have suffered from lack of maintenance. The cost of fixing some of these homes up may end up being substantially more than you bargained for. Then there’s the difficulty of selling a home in a neighborhood that has vacancies. Prospective buyers might be frightened off by the instability.

An alternative that some canny investors have begun to catch onto is apartment buildings. Right off the bat, there’s one part of the equation that should immediately make sense: if so many people are abandoning their homes, where are they living now? Bingo. Many former homeowners are becoming renters again, meaning there is demand out there for rental units.  While many people mistakenly assumed that no money down financing would not be available for multi-unit dwellings, smart investors have realized that they can apply many of their same single family money saving finance strategies to apartment buildings.

One of the best parts about opting to buy an apartment building versus building a portfolio of single family homes is the economy of scale that applies to many of your expenses. With your investment limited to one address instead of multiples, there is less running around for you. Maintenance costs, insurance and even taxes are typically lower on a per unit basis. And with a growing pack of investors circling the nation’s foreclosed homes and bidding up prices, you will face far less competition when searching for an apartment building to invest in.

The demand for rental units is still growing and the future marketability of the homes these new renters have left behind is uncertain. Why not take care of all the variables and invest in the apartment buildings they move to instead of the homes they lost.

Apartment Buildings Expert and Speaker, David Lindahl has helped thousands of investors become Apartment investors, literally letting other people pay their mortgage!