Tag: Buildings

Impacts of Rent Control on Apartment Buildings

Advocating rent control ignores the basic economic laws that govern housing markets. Rental property that is privately developed, owned, and operated is treated as a public utility. That philosophy harms not only the providers of housing but the consumers it was intended to serve.

Rent serves two functions in the efficient housing market operation. It compensates existing housing unit providers and new unit developers for the cost incurred to provide shelter to the consumers. Rent also provides economic incentives that attract new rental housing investment. Housing is like other commodities. The supply is related to the market price that prevails.

Providing economic incentives is particularly important in the evaluation of rent control economic implications. When the market is not regulated, rents rise as consumers compete for units that are available. The higher rent encourages new investment in housing rentals. Buildings are constructed, rehabilitated, and converted from nonresidential to residential until there is an elimination of the housing shortage.

Without rent increases, new investment is not attractive. Housing construction is sharply limited. There is no long-term housing shortage solution. When rents fall, the market receives a message that new investments have no room to succeed. Artificially restrained rents by a community …

Investing in Apartments

Many investors have thought about apartment buildings, but just do not know where to start. They have perceived barriers in their way, and simply never get started. This is a shame because apartments are one of the most profitable places you can invest, and one where you can start with very little, and grow your wealth fast.

I have worked with some of the top apartment owners in the country, and they all share several common traits.

Here are the most important things you need to keep in mind when investing in apartments:

  • Always be learning.
    All of the most successful investors I know are constantly working on their education. They are also all voracious readers and read several books per month. This commonality is not at all surprising because it is a trait found in successful people in all areas of business. If you are serious about getting started investing in apartments and becoming a success, you will need to dedicate yourself to education on the subject. Sign up and read the industry trade magazines. Attend the seminars and trade shows that you find interesting. Continue to read books not only on real estate, but other business, finance,

Buying Apartment Buildings

  1. When you buy an apartment building you have much less competition; you are one of only a few investors in your market going after deals. Chasing flippers you’re one of hundreds. Why? Houses are easy for people to get their heads around, so everyone and their cousin does it. Apartment buildings are more challenging, because of the high dollar figures involved and more details to master, so fewer people take them on.
  2. Buying apartment buildings makes you “much” more money. When you fix up a house you get one check one time; when you sell. You might have 100 hours into a rehab deal, and when you sell you net $30,000. Nice! However, take those same 100 hours and put them into buying a 50 unit apartment building. Now, not only do you get paid more, your apartment building pays you multiple times. When you close you get cash back from pro-rated rents, you pay yourself a management fee for raising private money for the deal. Each month you receive positive cashflow from the property. Then, 18 months or so after closing, after renovating the units, raising the rents and filling vacancies, you refinance and pull out a six figure,