In a report released January 6, REIS (a national commercial real estate data company) shows the apartment building sector continuing to lead the commercial real estate turn around. Your chance to get in on a good investment that will soon turn into a great one may soon pass by if you don’t take action now.
Apartment vacancies hit bottom at the end of 2009 and have been improving ever sense. In the fourth quarter of 2010, the national vacancy rate fell to 6.6%, down 0.5% from the third quarter. There was a net gain of 58,000 apartments rented in the fourth quarter compared to the third.
With low vacancy rates, rents are now going up. Apartment building owners know this is a good investment when average advertized rents now stand at $1,042. Accounting for move in incentives and other perks, the effective rent rate is $986.
Edging this good investment towards a great one is that a 100-unit complex now brings in revenue of $98,600 each month or $1,183,200 annually.
Building owners with a good investment know that apartments are one of the best ways of creating a reliable stream of cash flow to their bank accounts month in and month out. People from every walk of life succeed with a good investment in an apartment complex.
A Good Investment Beyond Collecting Rent
Commercial property investors view apartment ownership as a good investment for reasons beyond rent cash flow. Four additional wealth-building factors are:
1. Leverage – controlling and collecting rents on a high value property with little investment of your own.
2. Appreciation – in addition to rents constantly going up, the building value steadily increases over time.
3. Amortization – letting the rent income pay off the mortgage until you own the building out right.
4. Paid off mortgage – the rent income multiplies your bank account once the loan is repaid.
Follow this link to learn about Apartment Building Investing Secrets: http://realestateinvestments.net/free-report.php
Filling Basic Needs Makes for a Good Investment
The facts go on and on to make the case that apartment building ownership is a good investment. Filling people’s basic needs is virtually always a good investment approach. The downside is almost nonexistent. When home foreclosures go up, apartment vacancies go down. When apartment vacancies go down, rents go up. With vacancy rates now well below double digits you can expect rents to spike upward later this year. That is when apartment building ownership will go from being a good investment to being a great investment.
Probably the single biggest mistake keeping individuals from making this good investment is the perception that they personally have to qualify for a loan. That’s not how commercial loans work. The cash flow generated by the apartment building is the biggest factor underwriters look at when approving a loan. When it comes to a good investment, these loans are approved.