An apartment building can still be a good investment today. Why? For starters, there are still a lot of people who are still looking for homes to rent. In addition, the units of an apartment building do not just have to be spaces for residence or homes for families and individuals. By getting the right permits, units in an apartment building can be rented out as commercial spaces.
First-time buyers of apartment buildings will certainly have high expectations regarding this particular investment. This is mainly because they will invest a significant amount of money for this venture. As such, if you want to make sure you will own the right apartment building that can help you find success in the field of property rentals, make sure you avoid these common (and costly) rookie mistakes:
Not looking into the history and reputation of the apartment building's builder or developer.
As a first-time owner of an apartment building, the last thing you want to happen is to stumble upon some structural problems or system failures. As such, it is important to check the background, capability, and reputation of the company that constructed the whole property. Going online and asking companies or individuals that have worked with the property developer is a good way to get some ideas about their competency. If the property developer has a good reputation and has stellar reviews about the properties they built, chances are, it is quite safe to buy a building that they constructed.
Buying a property that is located in an unpopular area.
When purchasing an apartment building, keep in mind that aside from your budget, an important factor you have to consider is its location. Real estate experts say that it is a good idea to buy a property in an area that is improving since buying in a declining location will simply result in high vacancies and rent drops.
Not having sufficient cash flow and reserves.
As a newbie investor, if you are not confident with your reserved funds, you have to get into deals that will create a quick cash flow only. Avoid going into deals that won't provide a cash flow from day one even if that transaction promises a huge potential profit since you may be put at risk of being unable to pay the bills.
In addition, make sure you have enough cash reserves. Failure to do so can get you involved in different complicated situations. As a property owner, keep in mind that a lot of unexpected issues can happen. As such, you need to have a reserve fund that is adequate to pay for these emergencies.