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Why Buy Apartment Buildings?

By Peter Ciriello CCIM CBI
Whether you are looking for your upleg in a 1031 Exchange or just looking for an investment to own, there are many reasons why an apartment building might be a good choice for you.

If you know that you want to invest in real estate, why choose an apartment building. As stated before, there are a number of reasons but here are the two most important from a financial point of view: low risk and upside potential.

Low Risk.  Maybe you've heard the old saying "everyone always needs a place to live." That saying is never more true than when investing in apartment buildings. The idea of this plays to the risk you take when buying which is very little, because if ever you can't rent a unit, just lower the price a little.  The same is not true for any other asset type.

Upside Potential.  Most apartment rents raise every year, this is called compounded returns.  The best investments compound even small percentages because that income potential is very powerful. Even in rent controlled areas the upside potential is what everyone looks for.  If there is a large gap between the property's current rents and it's market rents even better.  But without a doubt, the best buildings to buy are non-rent-controlled.  This allows an investor to "ride the market up in the good times" and down in the bad times (without the risk of keeping rents where they are forever).

Simplicity.  Apartment buildings are simple.  The leases are simple, the ownership is simple, and the maintenance is simple.  Unlike other properties that deal in large corporations and their attorney's, apartment buildings deal with common every-day people who are just looking for a place to live.

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This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied as to accuracy of the information. We are not architects, offer no renderings/drawings or plans. References to square footage or age are approximate. Viewer must verify the information and bears all risk for any inaccuracies.  The future income and expenses of the Property, future development potential, and other future predictions may vary significantly during  ownership. Viewer shall rely on Viewer’s expertise to project the future income,  future development potential and expense of the Property.

* Through our business broker partnership with LA Business Pros.

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