When buying an apartment complex for the first time you first want to find the right investment for you. This means doing your research and evaluating the investment before you make a purchase. Like any other major financial commitments, when buying an apartment complex you should know what you are getting yourself into and have a plan for success.
One of the main things you should consider and evaluate before investing in an apartment complex is its location. Location is a vital factor for renters and the success of your investment relies heavily on this factor. Before you buy, you should evaluate the apartment complex’s proximity to major employment hubs, quality of the nearby schools and general appeal of the area. These are all features your potential residents will take into account before they even consider signing a lease.
Before you buy, you should also try to foresee potential issues relating to tenants. Although late rent payments and evictions are not something you can plan for, you can evaluate some of the issues that may already exist by taking a look around the property. If balconies are being used as storage spaces, some tenants are blaring loud music or trash disposal is a problem already that means it will most likely still be a problem after you purchase the property. You need to assess how you will handle existing problems. Also, if you are planning on making improvements to the property and therefore raising rent, you should evaluate if this will result in an increase in vacancies.
One obvious thing you should evaluate before you purchase an apartment complex is the condition of the property. A property built before the 1990’s will most likely need some renovation in order to maintain an appeal. You need to consider things like renovations, cosmetic and major repairs, and landscaping. If a price tag seems too good to be true it probably is. Repairs or problems that aren’t visible to the naked eye can drain your pocket book and turn your investment into a costly mistake.
Overall, when you’re evaluating a potential property that you would like to invest in you should look at the apartment complex with the same judgmental eye as a potential resident. Would you want to live in that apartment complex? Does it offer the same advantages and amenities as the complex down the street with comparable rent?
These are just a few of the things you should consider if you are looking to invest in an apartment complex. For first time buyers it can be an overwhelming experience, but if you do your homework and are ready to take on the responsibilities of owning an apartment complex then it can be an investment that is very worthwhile in the long run. Apartment complexes are investments, that when managed properly, can pay handsomely. After all, everyone needs somewhere to live.