Apartment Investing Basics

Many investors looking to get started in real estate look at investing in apartments. Apartment investing is a great way to begin investing in real estate. This is because apartments are something that we all have had some introduction to and are familiar with.

We all understand that “people will always need a roof over their heads”. And that is the nice thing about investing in apartment buildings. Getting started will take some time, and if you begin with the basics, you will be well ahead of most investors just starting out.

Benefits of Apartment Investing:

1. Cash Flow
Bought properly, apartment buildings will provide a steady source of income for the owner. If you purchase a building in a good area with good management, your apartments will remain occupied, putting money in your pocket every month. The nice thing is that all of this can more-or-less happen on autopilot because you cah hire a property manager to handle the day-to-day activities.

2. Appreciation
This is an area where apartment buildings shine. Because the value of an apartment building is based on the income it provides to the owner, when you increase the net income, you increase the value of the property. Period. It is that simple – you simply purchase properties where you can increase rents and reduce expenses – realistically – while keeping everything properly managed and maintained. Try doing something – anything – to increase the value of your stock portfolio. You have no control whatsoever over your investment.

3. Equity Increase
Your equity also increases every single month. How? Because your tenants are paying off your mortgage. It may not be large equity jumps like when you manage the income and expenses. However, every single month your mortgage principal balance is reduced, thereby increasing your wealth. Month in and month out.

4. Tax Advantages
Apartments provide the owner tax benefits both through depreciation while owning the property and through a 1031 exchange. I don’t buy based on the tax benefits, but they are a nice bonus to get involved with apartment investing.

Steps to Get Started Investing In Apartment Buildings:

Education
Begin by educating yourself on apartment investing and property management. Even if you are going to hire someone else for the property management, you will want to have some knowledge base to go from. Start out by going through some apartment investment courses – they are difficult to find, but well worth looking for. In addition, if you can attend a live event with other investors, you will benefit from that, as well. Just by getting around others with like minds, you will be heading in the right direction.

Property Analysis
Remember no matter how nice a building looks, or how new it is, or how great the neighborhood is, it all comes down to the numbers. Never, ever lose sight of that fact. Decide what your goals are for investing in apartments and choose the properties that will help you get there – fastest.

Take Action
One of the biggest mistakes I see is a would-be investor who invests in his or her education, and never buys their first property. Take your time getting educated and going through the process, but I would encourage you to follow through and take action when the time is right. Then keep going. Get your first property and keep building your wealth over time.

Serviced Apartment – Top Reasons to Choose a Serviced Apartment

If you will be staying in an area for an extended period, you may be trying to decide what type of lodging you will use. While you have several options available to you, a serviced apartment is definitely an excellent choice. Whether you are traveling for leisure or for business, this accommodation option can provide you with many benefits. Here is a look at some of the top reasons to choose a serviced apartment next time you travel for a long period.

Reason #1 – Feel at Home

One of the main reasons to go with a serviced apartment when you travel is that these apartments can make you feel at home. Instead of providing you with the impersonal feeling of a hotel, the setup of apartments will allow you to really feel like you have a home away from home. They can also help you by providing that homey feeling that makes it easier to adapt to the new area.

Reason #2 – More Space and Freedom

More space and freedom are available when you go with a serviced apartment, which is another great reason to go this route for your accommodations. Simply staying in a hotel provides you with very limited space. However, you’ll have plenty of space when you stay in a nice apartment, which makes it nice because you’ll have separate areas for eating, sleeping, working, and living. You’ll even be able to have family with you if you choose. The apartment will also help to provide you with your own space, which is really important, whether you’re relocating, visiting on business, or traveling for leisure.

Reason #3 – Big Savings

You’ll definitely save a lot of money when you rent a serviced apartment. The rates for these apartments are based on the apartment, not the amount of people staying in the apartment. If you’re traveling with a group or with your family, this really can save you a lot of money, since you won’t have to pay a fee for each person staying with you. Another way you can save is by cooking some of your own meals. Instead of having to eat out all the time, you can cook in the furnished kitchens that are provided in these apartments.

Reason #4 – Excellent for Business Purposes

A serviced apartment is also excellent for business purposes, which is another great reason to go this route. You’ll enjoy many great amenities that can make a business trip easier. Most apartments offer flat panel televisions, broadband internet, kitchens that are fully fitted, and more. Traveling on business can get frustrating, especially if you don’t have enough place to work. With an apartment, you’ll have plenty of room to work so you won’t have to take your work into the bedroom.

Reason #5 – Great for Groups

Going with a serviced apartment is definitely a great option if you are traveling in a group. It can make it a lot easier to book a place for a group. It’s easy to book a three or four bedroom apartment that can provide everyone with their own bedroom and private space. With the living room, kitchen, and dining area, everyone has plenty of space so they don’t get on each other nerves.

Tips on Getting Your Security Deposit Back From Your Apartment Rental

It is always a point of contention; once you have moved out, you expect to get your security deposit back in full-just as you gave it to the Landlord. On move out day, you take a look around your now former apartment. Everything looks good. Well, maybe a small mark on the wall here and there. And maybe you could have cleaned out the refrigerator a little better. But hey it does not cost that much to make an apartment nice again. Does it?

One of the hardest costs for Landlords to absorb is painting. On the open market, try finding a painter who could repaint your apartment for less than $500! Fortunately, apartment complexes typically have in-house maintenance staff that can do the work for less than market labor value. The costs are, more than likely, even less to the Tenant. Still, Landlords are stuck with having to absorb materials costs which remain the same regardless of any particular circumstance.

So if you have made many marks on walls, have a child(ern) that has used something other than a water soluble substance on walls, or just been careless with hanging things and moving furniture around, then chances are you will get hit with a full paint-out bill. After so many marks and scratches, it is no longer worth it nor all that possible to do a “touch-up” job.

Some common ways to mark up walls include:

  • headboards from beds
  • sofas pressed snug against walls
  • televisions pressed closely to walls (for cathode ray tubes)
  • dogs and cats scratching or rubbing against corners
  • children throwing toys or playing off walls
  • rearranging furniture, especially in the living room and bedroom
  • buying new furniture-especially when you first move-in. It is easy to forget that from day one if your movers are not careful or you are not, you could have many marks and scratches.

Another cost is floor cleaning. If there is hardwood flooring involved, and you were not that careful moving in or moving out your furniture, it can cost anywhere from $1 to $3 per square foot just to sand and refinish! Simply putting another coat of polyurethane can do the trick, however, if the damage was extensive, it will bleed through and look bad for the next Tenant-who may even get blamed for some one else’s damages! Also, if there are pets involved, this is particularly risky to the Landlord. Unlike carpeting, getting urine and urine and feces smells out of hardwood flooring is extremely difficult.
Of course, the extreme measure is to replace the parts of the floor that are really bad. That can get a bit pricey plus make the flooring look uneven and nonuniform.

For carpeting, it is much easier to maintain and clean even though the wear is faster. As a Tenant, it can be worth it to you to find a professional carpet cleaner. Typically, you can find one for between $80 to $300. If you leave it to the Landlord, expect to be charged. When you move out, it is easy to forget that the apartment was cleaned and prepared for you, and the Landlord owes that courtesy to the next Tenant.

So next time you are wondering why you have not gotten that security deposit back, remember the two biggest costs to reviving the apartment, put yourself in the Landlord’s shoes, and then start calculating.