Why Invest In Apartments

Lenders would rather lend large amounts of money over smaller amounts. Naturally they want to lend more, because that means they would get a higher commission from it. Buying single family homes, the borrower must qualify for the loan. They look at the borrower first then the property. With apartments it is the opposite. Logically if you own a 25 unit apartment building and the debt service/mortgage is $15,000 a month very few individuals could support that payment on their own. The lenders want to know how much income the property brings in. The property is the business so to speak.

Lets say you wanted to buy 20 homes. You would have to get 20 different appraisals, loan documents, title fees etc. Now after you own these homes, you have to maintain it…sinks, toilets, paint, carpet etc. This will be a huge task even if the homes where in the same city. Compare that to a 20 unit apartment. Things are simplified. 20 people going to work everyday, to pay your mortgage. Convenience is key, same carpet, sink, steam line billing etc. In regards to tax benefits, you could establish one LLC for the apartment building vs. 20 LLC for the homes. And filing for taxes!?... With the 20 homes you will need to fill out 20 different forms. You will need to track each property separately such as labor, supplies, maintenance, utilities and materials. You see that this can get messy. Another benefit of investing in apartments is that you can higher a property manger to take care of the property (of course you can do this with the 20 homes, but it will cost you more as an owner). By hiring a property management company, they do all the work. Your job is to manage the property management company. Each month they will send you a check (that is if there is cash flow). Imagine, that you wanted to sell your 20 homes, how fast do you think you could sell them? Imagine all the work that will go into that (appraisals, showings, other documents). Now look at selling your one 20 unit apartment building. One transaction.

Other reasons:

Investing in apartments is an easy way to towards financial freedom. Through leveraging only invest a fraction of its value and get income for years from that property, even if you sell it at half of what you paid for it!