5 Things You May Not Know About Apartment Investing

  1. An apartment complex is priced off the net operating income rather than what the property sold for next door. This means that in a down housing market, apartment buildings aren’t affected like single-family homes are.
  2. Increasing the rent on each apartment by $20 per month may not sound like much. However, if you have an apartment complex with 100 units, that’s an extra income of $24,000 per year. Not only that but with increased income comes increased property value. Since the apartment complex’s value comes from the income, increasing the rent by $20 increases the value of the property by $240,000! (varies by market)
  3. You can invest in syndicated real estate with your IRA, Roth IRA, or any rollover retirement fund. There are many self-directed IRA companies that you can set up a self-directed IRA with. It takes just minutes. Then you can roll over these funds into a real estate investment, such as an apartment building.
  4. Investing in apartment buildings is not a get rich quick investment. Most of these investments should be held 5 years on average. This gives enough time to add value and execute the exit strategy.
  5. You may need to look outside of where you live to invest. The area in which you live may be priced too high to produce the returns needed. Look into other markets, perhaps even out of state.