anyone own an apartment complex?
 

please discuss pros and cons of this type of investment

pros , many bathrooms

cons , you have to clean em all

Constant upkeep and occupancy levels are key. There is plenty of money to be made. IMHO it is the fastest way to become a millionaire.

umm no

umm no what?

i think it is a great investment

An appartement isn't an investment !

an apartment complex meaning the whole building

I have 30 units. airconditioning is the major financial drain. have your maintenance people change the filters in every unit every month. It will save you tons of money.

Tenents never change them

Trump is just an egotistic model, I own all of "Trump" investments :Graucho

why not just make the tenents pay the electricity bill for their apartment?

Interesante!

Going out on a limb here....
I think he ment that replaceing the AC's after the tenats never replace the filters in them......
correct me if im wrong.

Its not about electric bills they can go fuck themselves.

Its about 10k in replaceing units, sheet rock, carpeting etc etc...

hmmm
adult webmasterboard...

just invest in one, silent partner. you don't want to go through managing a staff, acct books, taxes, paper work, etc...

no, why

Im going to invest in 2 apartment complexes in Spain next month.......my brother does it all the time, and he makes nice money with it

bump, interesting topic

heard it was a big hassle.. better to buy single family homes and bank on the appreciation.. 10% down with a 10% increase in value in a year = 100% return assuming you can cover mortgage payments with the rent

I think he means owning the whoel complex and renting it out. Pros are making money in the long run. Cons are dealing with tenants. :2 cents:

VERY slow money that way.

If you have the time and can handle stress

a complex is the way to go

or buy say 4-5 duplex's

Are you crazy? 100% / year is the highest yield return you could expect from any investment.

That would involve installing individual electrical units for each apartment. This is not exactly cheap for a large complex.

Plus, some tenants want to stay in a residential unit where the energy costs (heating, air conditioning and power) is included in the rent.

do you honestly think renting duplexes is much all that much different than single family homes?

and taxes and several other expenses. you're right though, its a great investment.

Personally I wouldn't invest in any multi-residential units in North America at this time. The prices are so high that you barely make enough to pay the mortgage with a full occupancy level.

some of my investments yield way better

^^

depends on the area

Pros

If the apartments are away from you... travelling to them might
be a business expense. e.g. you live in Chicago, but you
buy rental units in Miami and L.A. (and leave maintenance
and management to an on-site Super)


cons

Watch for local laws. Some places are very landlord-friendly
(Florida) and others are very tenant-friendly (the Northeast)
You don't want to get into a situation where evicting a bad
tenant takes months instead of days.


:2 cents:

also one of the safest. Everyone is making it sound like its a simple process to buy an apartment complex, and make millions. If you don't know what you are doing you will lose your shirt.

:1orglaugh

single family homes are a lot less hassle and a lot easier to sell than big apartments.. I would much rather just cover my costs on the front end and make a huge amount on the back end while focusing on making money in other areas (i.e. adult).. guess it's just all about what you're looking for

i'd recommend if you buy a complex, when you are a little more experienced in being a landlord. like someone mentioned, you could lose your shirt.

for example (taken from a book):

You own a 12-unit building. You underprice each unit by $25 a month. The cap rate is 9%. How much does this underpricing error cost you?

Lost income = $25 x 12 units x 12 months
= $3,600 per year

Lost building value = $3,600 / .09 = $40,000

You've lost $40,000 of value just by underpricing $25 per month.

thats a con, if you get something like that its best to have it close. its a pain in the ass to travel across the country for stuff like that.

We own one
Pros good supply of cash flow every month.
Cons right now is a wrong time to buy property
give it a couple more years real estate prices
should be falling soon.


:thumbsup

An appraiser would adjust below market rents to the market (i.e. would add the missing $25 per unit per month) and cap that net income at 9.0%. Then he would deduct an income shortfall to the loss of income for the term of the lease.

For example the property has 12 units with an average rent of $475 per month and an average expiry of 6 months. Say the market is at $500, then $500 would be used in determining the potential market value of the property. Then he would would deduct from that value $1,800 (12 units x $25 below market X 6 month before you renew the lease). thus instead of a loss of $40,000, the actual lost would only be $1,800.

Or the appraiser would increase the cap rate to say 8.75% to consider growth rent potential.

lots of great info here. id like to discuss further with ppl who have actually done this.

I was planning on doing this in the future. I would love to discuss this more and learn what i can with people that know what they are talking about. :)

bump for the friday day shift

i own s few multi family properties, and am currently buying a 3 family now.

treat it as a business.. your tenants are your business customers.
screen them, be fair to them, know your housing laws.

upkeep. hire good maintenance people. repairs, supplies, motgage interest, are tax deductable.
except if u live on the property. then u cant deduct for yourself.

appreciation. well maintained properties almost always increase in value creating equity.

rents. rents should always be market rate. market rate usually covers your basic mortgage, insurance, taxes and water/sewer.

always.. always.. always collect a security deposit.
last months rent usually weeds out the scum (but not always)

i could go on and on