Experts are already predicting that the real estate markets are faltering for 2009-2010 quarters and that property value will steadily continue to drop. This will lead to many new foreclosures and delinquencies which will be added on to the millions of properties that have already experienced the dramatic drop. For any real estate investor, under the impression that the future is looking bleak until the idea of owning rentals and apartments come to mind. There are many questions to think over such as the risk involved, bad tenants, and several others. The truth is , though there are a lot of risks involved with owning apartments and rentals overall, the trend in being a landlord is on the rise.
One of the main reasons why the average Joe invests in real estate, is because they way had seen a commercial and heard all the hype about purchasing with no cash down route, This makes the buyer think that they can buy a house with zero down using various methods including foreclosures, fix and flip, subject to, and many more. You can purchase property that way, and you can use the same method with apartments. There are plenty of benefits with investing in multifamily properties that will leave you ready to jump in feet first. Honestly, there isn’t a single reason not to invest in apartment buildings. Here are three reasons why investing in apartments are an excellent option.
Apartments are more affordable-The average cost per month in rent can range under 600 per month where most mortgages are on average of 1000 a month. The difference is the gap between the mortgage payment and the rent. When these gap increases, many people cannot afford to pay a mortgage to a home, The gap can become bigger in a few ways, either the rent decreases or the mortgage increases. In many cases the rent does not decline, at least not by much.
Leverage- One of the greatest benefits of owning apartments is the leverage. Real estate investors relate the term leverage with money. However, there is much more to leverage than that, such as hiring others to work for you because you can afford to. Many investors do not have the time nor want to manage their properties so this type of leverage will allow you to enjoy the benefits of owning and having others work for you.
The numbers are sensible- When you are looking forward to purchasing family homes and properties with at least 2-4 units , those expenses usually include insurance and taxes. Some are fortunate enough to locate another line item such as management or utilities. However, that does not always mean that other expenses do not exist. There is always the risk of turnover, tenant issues, and many others. When you purchase multi family housing, there are expenses that also include utilities, maintenance, management, and advertising among several others. However, unlike renting houses, your costs are spread out across several units. In comparison to 20 separate houses with their added expenses and travel, in reality apartments make more sense.