Today’s financial markets being highly ‘volatile’, if the savvy investor wants to ensure long-term capital growth and security, he needs to look beyond traditional financial investments, like stocks and bonds. As part of a larger, well-diversified portfolio, the ownership of a multi-family apartment building can be considered a great investment strategy. Most of the time, thoughts of spending time in painting or trying to collect past rent from overdue tenants, make many novice commercial real estate investors stay away from an investment in apartment building. It is actually not that dismal a picture. Some surprising facts, about apartment building investments, will completely change the way you look at this unique investment opportunity.
In Warren Buffet’s famous words go thus – ‘I prefer to invest in a market when there is blood in the street’. To put this differently, an investment expert looks for opportunities where others may plan to stay away. All across the United States, residential real estate markets are in a tailspin. In many metropolitan markets, foreclosure rates are at a record high.
Whether or not there is an end in sight is anybody’s guess. Otherwise, rising mortgage payments and an economic slowdown may push more families from their homes. A strategic investment, made in a medium sized apartment building in barcelonaapartmentsrent.co.uk, can allow an investor to provide the much needed housing to a potential base of renters; in comparison to the decision to buy into a weak residential housing market while prices may be declining.
People will always need a place to live, a slowing economy and business cutbacks or otherwise. There never has been a higher demand for rental property. A recent United States census observes that at present nearly 36 million (approximately one-third) of all households in the United States are occupied by renters. To be more precise, about 83% of all households under the age 25 are renters in benidormapartmentrental.co.uk, as are about 55% households between the age of 25 and 35. As a less expensive and less burdensome alternative, the dependence of the growing population of senior citizens on rental housing, in comparison to home ownership, is also expected to grow.
In complete contrast to residential homes, the purchase price of many apartment buildings is much below the replacement cost. Well-run older apartment properties are in healthy competition with newly constructed properties that, in order to cover their mortgage payments, generally charge higher rents. Moreover, the value of existing properties increase, meaning an increase in the value of your investment, when newly constructed apartment buildings come into the picture.
The fact that you will be able to leverage your investment is actually a ‘package deal’ with an investment in an apartment property. Banks are ever so eager to lend money on a good apartment building in benidormapartmentsrent.co.uk, even though the sub prime residential mortgage market appears to be crumbling. Generally lending up to 80% of the purchase price, banks, in some cases, may actually make an allowance in the form of an owner-financed second mortgage where the existing owner holds up to 10% of the purchase price.
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