If you are thinking of investing in a form of real estate, there are numerous markets to check out. One beneficial type of commercial real estate is apartment complexes. Investing in this form of commercial real estate is more involved than other residential real estate properties, and involves a richer understanding of the financial and management facets.
Here are 3 questions to ask yourself when considering investing in apartment real estate:
Is Buying an Apartment Complex Right for me?
It is important to weigh the pros and cons of buying apartment complexes. These typically involve more research, time, and expenses than other forms of commercial investment. However, apartment complexes and multi-family properties have many benefits like recurring income, diversification, and the opportunity for extra sources of income like coin-operated laundry facilities and rentable common areas for parties and events.
When investing in an apartment complex, you will need to decide if you will be hands-on in the details of the business or outsource the day-to-day management. Hiring a management company or onsite manager will cut into your profits, but if you do not have much experience in the space, it might be money well spent.
What Kind of Apartment Complex Do I Want to Buy?
Once you decide to invest in an apartment complex, you will need to decide the type of complex fits your investment strategy and plans. The types of apartments range from Class A – New, luxury apartments to Class D which are typically older than 30 years.
Some things you will want to examine before determining the type of apartment complex you want to invest in are your personal and financial criteria, the maintenance and management required, the number of units, and of course, the return on investment.
Where Do I Want This Complex to Be?
Southeastern North Carolina has seen an increase in apartment complexes and multi-family properties due in large part to the growing population. Since the 1990s, the Wilmington-area has seen a 40% population growth creating an increased need for new housing.
Locating an investment property can be done on your own or with the help of a commercial real estate agent. This is where we come in. At Maus, Warwick, Matthews & Co., we have a team of agents and brokers with over 30 years of experience to help you find the perfect apartment complex for you.
Other Considerations
When assessing your potential purchase, make sure to evaluate your location, number and size of units, property amenities, construction details, and finances. Take a close look at the vacancy rate, expenses, and cash flow. By going over all of these before purchase, you will be made aware of any potential issues and be able to proactively address them.