Factors to consider before buying an apartment building

If you are a new buyer you will need to learn the fundamentals of apartment building investing. Having a basic understanding of valuation, due diligence, and financing before purchasing will give you the confidence to make the right decision when the timing is right for you. For this reason we connect buyers with a number of different educational sources that help them become confident apartment investors. It is important to understand location, and it’s important in relation to the value and the number of doors you will be able to purchase under one roof. Equally important to understand is the level of hands-on managing that you’ll be doing and choosing a location with a comfortable travel distance from your home or place of work. Ideally you want to be able to maximize the number of doors you can purchase under one roof, as opposed to fewer doors under one roof or several doors under several roofs. This is also an important factor to consider when thinking about unexpected capital expenses and ongoing maintenance. For example, if you own a building with six doors under one roof, or a building with twenty doors under one roof, it’s always easier to budget for unexpected repairs and regular maintenance with a greater number of doors. This we refer to as “the economy of scale”. Equally important is the number vacancies. Two empty units is going to have less of an effect on a twenty unit rent roll as opposed to a rent roll with only six units. We also have a buy-side brokerage program where we work with buyers to find them the property they want, in the area they want, at a fair market price. Please watch our videos on this topic for more information on our buy-side brokerage program.