Income properties can help your business portfolio by providing a relatively stable income, especially if you have secure tenants. You have a few choices for income properties, but your thoughts might have landed on buying an apartment building. If you don't have a lot of experience with income properties, buying an apartment building might be a challenge for you.
This is why it is important to hire a professional real estate agent who can work with you to find you the right property for your needs. Here are a few other things you need to think about before you buy an apartment building.
Locations of apartment buildings are vital in getting tenants to rent with you. If you wish to buy in the city, then your building needs to have access to a good transit system for those tenants who do not have a vehicle, it also should be in close proximity to jobs, schools, and grocery stores. You should also think about its location in regards to restaurants, entertainment, and retail stores.
If you buy in a more rural area, the same rules apply - is the building close to a city or other large job center? Do your tenants have access to highways to get to their existing jobs in nearby towns or cities? Also, is the building on a lake, and does it have good views for your tenants?
These are all important considerations in picking a good location when buying an apartment building.
Along with deciding on a location, you need to decide on what type of apartment building you want. For example, do you want a low-rise, double unit building? Or would you prefer a larger multi-unit building that could be a highrise?
Keep in mind that the larger the building, the more financing you will need to secure for the purchase as well as its upkeep. If you buy a newer building, it could end up costing you more upfront in price, but many newer buildings have luxury or upgraded amenities and fixtures renters might like. Older buildings may need to be renovated, but will cost you less upfront.
Think about what your return on investment would be with each different type of building, and taking into consideration the location, and what the rents are going for in the area to help you choose the apartment type that's best for you.
Decide whether or not you want to have a property management company or not to care for your building in your absence. If you decide to manage the property yourself, keep in mind, you will need to collect rents, do the maintenance yourself, and market your property to attract tenants to your building.
Tenants are able to directly contact a property management company for any emergencies, repairs, or concerns they have regarding the building. This is helpful to you especially if you have another job and the building is a secondary income to you.
It's possible the building you are considering was poorly managed prior to being up for sale, so this could mean you need to do extensive repairs, or upgrading of the facilities such as putting in a laundry room, parking lot repairs, and even unit repairs.
A management company can help organize and find contractors to fill those roles for you.
If you opt for a property management company, then ask your agent when you are buying the apartment for recommendations.
If you have any questions about buying an apartment building, or finding a property management company for your apartment building, then
contact us
at Heritage Realty & Insurance for more information.
