The 5 Main Reasons Apartment Investing Makes Perfect Sense

Reason 1: Much higher income potential. This goes with the territory but because of the larger number of units available to generate income, the amount of income derived from one multi-family property is multiple times that which could be received from a single family investment. If one tenant moves out in your apartment, there are many others to help cushion the financial impact.

Reason 2: Less competition. The same irrational fear of larger numbers that keeps some investors away from apartment buildings also gives the advantage to the investors who do seek the knowledge and take action in this market. It keeps the lower-level investors away from bidding on deals.

Reason 3: Less owner management. Because of the higher margins, it is often advisable to hire professional third-party and reputable management companies that are familiar with the day to day maintenance and management of properties. This luxury is often not affordable to the owners of single family real estate.

Reason 4: Lenders are on your side. In single family homes, lenders often only care about the comparable sales and appraisal to determine the value of your investment. They are not “as” concerned about the financials as they are in multifamily real estate. This is good news for you because lenders will scrutinize the numbers as hard, or harder, than you will and if the deal does not make sense, many will not make the loan for you in the first place.

Reason 5: Higher “return on energy”. Due to the nature of commercial real estate, securing a property with 25% equity in a $1 million building is equal to $250,000. Conversely, 25% equity in a $100,000 single family home is only $25,000. It is not 10 times harder to buy an apartment building, but the returns can easily be 10 times or more over single family homes.

With all of these great reasons to invest in a proven commodity, what are you waiting for? You simply need a few tools and a new basic knowledge base and there’s nothing holding you back from there.

The 5 Main Reasons Apartment Investing Makes Perfect Sense