There are many reasons to buy an investment property. One of the main reasons is to use it as an income vehicle and live in it. If you are trying to get into the real estate game, you will want to consider buying an investment property before you own your home or if you already have a home and would like to rent it.
If you are planning to live in your investment property as your primary source of income, the best way to do so is to buy an investment property that is undervalued. You can buy a single-family home as an investment property and then rent it out while paying down the mortgage. You can also buy a multi-unit property and lease individual units or rent the entire thing out.
In either case, you are responsible for paying back capital, repairs, collection fees, and general management for tenants. It takes money to get a new home, but in the case of a single-family home, it is generally very affordable because you purchase at a fraction of the cost of purchasing a home in a more traditional market.
Another type of investment property is an apartment complex. In most cases, apartment complexes are considered high-end residential communities because of the multiple buildings and amenities. An apartment complex can provide you with housing that is comparable to single-family homes and offers a lot of the same services you would find in a community such as schools, grocery stores, shopping centres, parks, and restaurants.
One disadvantage of purchasing an apartment complex as an investment property is that you would be responsible for all the costs associated with the maintenance of your apartment complex. The apartments are not fully furnished and often tenants do not even have laundry facilities, parking, or a central air conditioning system.
As with buying single-family homes, buying an apartment complex as an investment property is an ideal way to buy into the property market. However, it is important to know how much the complex is worth and what its future resale value will be when you sell it. You must also know how many years it will take to recoup its cost.
Before making your decision to buy an apartment complex, be sure that you understand exactly what you are getting yourself into before you take the steps to purchase the property. Take an active part in the process of the purchase to make sure that you are purchasing the property at the right price. It is important that you do your homework to find the right complex and that you research the neighbourhood and the area that the complex is located in.
Once you buy the property, you must make sure that you understand what to do with it once it is yours. If you are going to rent the property, you have to make sure that the property is ready to be rented out to help you start your business. Renting is one of the most important decisions you will ever make, so make sure that you choose the correct tenant.
A third important decision to make when buying an apartment complex as an investment property is how you are going to pay for it. You have to be prepared to pay a higher monthly mortgage payment than what you would pay for a single-family home in the same neighbourhood. Make sure you are prepared to pay off the mortgage loan in as little time as possible.
You have to make sure that you are prepared for the possibility that the value of the apartment complex could decrease over time. Although apartment complexes often appreciate, they also tend to depreciate after a while.
It is also important that you make sure that you get involved in the construction of the complex as the manager and make sure that you know all the ins and outs. Of course, there is a lot that goes into being an owner and a successful manager, but you must learn the ropes and do your best to keep the building in tip-top shape. The last thing you want to do is let your investment property sit vacant because you do not want to have to spend money on repairs in the future.
By understanding the challenges and benefits of investing in an apartment complex, you will have no trouble buying a great investment property. Remember that when you do buy an apartment complex, you are making the most money you will ever make in your lifetime!