Why Invest in Apartments? -Steven Taylor of Taylor Equities
As an investor, I receive a lot of questions from those who are interested in entering the real-estate industry. One of the most common questions I am asked is: “Why invest in apartments?” Multi-family properties are among my favorite investments, because there are many benefits to investing in apartments. Apartment buildings create consistent cash flow, are always in demand, and have major management advantages. Today, I will break down a few of the reasons I encourage investing in multi-family housing.
Multi-family housing will always be in demand.
While the “American dream” may be to own a home, the reality is that many individuals will never be able to afford their own single-family unit. Whether your tenants are young graduates just entering the workforce, or families who can’t purchase a stand-alone home, there will always be a market of people looking to rent an apartment. As you look at areas to purchase an investment property, consider the demand. Are there new businesses nearby with employees looking for housing? A popular school system? A trendy neighborhood on the rise? A major advantage of investing in apartments is high demand, so be sure to tap into the best area before buying in.
Multiple units under one roof are easier to manage than individual properties.
If you are only investing in single-family homes, you may end up with several properties in different parts of the city, or the country, to look after. With an apartment building, you can own and rent many units all in one convenient location. Keeping all of your units in one building allows for easier management. As a landlord, you can hire a single property manager to manage the entirety of your apartment building, rather than needing to be in several places at once. Having assistance on site is the key to a smooth multi-family building operation. Once you have a great property management company in place, running an apartment building can be smooth sailing.
It is easier to add value to an apartment building than to a single family home.
It is difficult to force appreciation on a property. One of the fastest ways to increase the value of a property is to add amenities or features that benefit the tenants. Due to the nature of a multi-family building, it is easier to phase in amenities than it is for a single family unit. For example, if you have extra space in an apartment building, you can often add appealing features such as a gym, laundry room, or business center. This extra space doesn’t just improve the value of one unit, but forces appreciation to all units. Not only does the building become more functional, but everyone benefits. These improvements can keep existing tenants happy, attract new tenants, increase cash flow, and eventually improve your resale value.
Depending on your area, you could receive tax breaks.
Providing safe and affordable housing is one way to give back to your local community. The government often rewards those who own multi-family units by providing them with tax incentives. There are many factors that will determine if you are able to obtain any tax breaks as a part of your business — building classification, size, and other traits will be at play. But, if you invest in multi-family properties, it is worth consulting with a tax professional to find out which deductions and incentives you may qualify for. You may also be able to obtain grants to help you with purchase or renovation costs upfront. Do your research before investing to be sure that you reap all the potential benefits of investing in apartments. — Steven Taylor of Taylor Equities
