Apartment (by Linda [TX]) Dec 5, 2017 2:49 PM|
Apartment (by Still Learning [NH]) Dec 5, 2017 3:29 PM
Apartment (by NE [PA]) Dec 5, 2017 3:33 PM
Apartment (by Linda [TX]) Dec 5, 2017 3:46 PM
Apartment (by NE [PA]) Dec 5, 2017 3:56 PM
Apartment (by Ken [NY]) Dec 5, 2017 4:16 PM
Apartment (by Robert J [CA]) Dec 5, 2017 7:35 PM
Apartment (by WMH [NC]) Dec 6, 2017 5:25 AM
Apartment (by Rich [PA]) Dec 6, 2017 6:55 AM
Apartment (by S i d [MO]) Dec 6, 2017 6:56 AM
Apartment (by Jeffrey [VA]) Dec 6, 2017 8:18 AM
Apartment (by Doogie [KS]) Dec 6, 2017 10:45 AM
Apartment (by Robert,OntarioCanada [ON]) Dec 6, 2017 3:27 PM
Apartment (by Luba [NY]) Dec 7, 2017 6:42 AM
Apartment (by Ray-N-Pa [PA]) Dec 8, 2017 7:33 PM
Apartment (by Linda [TX]) Posted on: Dec 5, 2017 2:49 PM
I know most of us here are landlords for SFHs. Just out of curiosity, anyone has invested in apartments and can share some experience here?
Apartment (by Still Learning [NH]) Posted on: Dec 5, 2017 3:29 PM
13 units between 2 buildings. The nice thing is even though you still try to minimize vacancy, if you have a longer vacancy or a few the same month, the rest of the units carry the expenses. Occasionally even though you do your best to screen, there can be tenant drama between units. Your money is still made in a good purchase price and then running it efficiently. Over a certain # of units in the building and it's a commercial loan with usually 25% down and adjustable rate. Possibly less roof, siding, furnaces depending on the building in comparison to the same # of sfh's. --24.61.xxx.xx
Apartment (by NE [PA]) Posted on: Dec 5, 2017 3:33 PM
There is a tremendous mix of owners here.
It's all about numbers. --174.201.x.xx
Apartment (by Linda [TX]) Posted on: Dec 5, 2017 3:46 PM
Thanks Still Learning [NH] and NE [PA]! I personally always think apartment is a lot more efficient, especially when you can get to an apartment with more units. The problem is here in Texas, the market is getting very hot and it is hard to find anything that is for sale now. --47.187.xx.xx
Apartment (by NE [PA]) Posted on: Dec 5, 2017 3:56 PM
Linda, don't use that as an excuse to not look. Just a reason to look harder. They are always out there. --174.201.x.xx
Apartment (by Ken [NY]) Posted on: Dec 5, 2017 4:16 PM
I have had many 2-4 units and had a 7 and an 8 unit.Different class of tenant,less willing to do anything for themselves in apts,less likely to have there act together.You will hear about every little thing about the other tenants.Any more multis and I will hire a manager for them,i am tired of listening to them cry.If you want to buy more deals at better prices you need the sellers calling you.Bandit signs are my best source of motivated sellers,i do mailings to people in tax foreclosure and behind on mortgages.I also get great deals at foreclosure auctions,I haven't bought a house from the mls in years.When you start having motivated sellers calling you and you have no competition when you go to make a deal you won't even look at listed properties anymore. --72.231.xxx.xxx
Apartment (by Robert J [CA]) Posted on: Dec 5, 2017 7:35 PM
Current owner of over 100 rental units in the Los Angeles area. Until Los Angeles, West Hollywood and Santa Monica put "rent control" into play -- owning units was a blast compared to a vacant SFR.
If you buy right, anything positive you to an apartment will bring in higher rents. With a 15 times gross multiplier for each extra $1 in rent you bring in per month -- means the property is worth $180 more in resale value.
With rent stabilization, rent control, annual Heath Department Inspections, every 3- 4 years the Housing Department do their inspections also.
When a tenant doesn't want to pay rent, all they have to do is complain to Housing that something is wrong. Like one tenant who didn't pay rent in my 16 unit said they had no hot water -- reason for not paying rent. The eviction judge said, until I restore that tenants hot water I can't evict. I had to explain to the Judge that I was a Licensed Master Plumbing Contractor and this property has a central water heater. If that tenant had no hot water then no one in the building would have hot water either and there were no complaints to the city. I also had my property inspected by Building and Safety (for $250) and have the head inspector here to testify that that tenant does have hot water and everyone else.. --47.156.xx.xx
Apartment (by WMH [NC]) Posted on: Dec 6, 2017 5:25 AM
We have two quadplexes and a few duplexes. We don't find any of the issues Ken mentioned. We'd buy apartments in a heartbeat but they don't really exist down here - just a few and those stay full and don't go up for sale! --173.22.xx.xx
Apartment (by Rich [PA]) Posted on: Dec 6, 2017 6:55 AM
I own a 3-, 4- and 8-unit buildings. I love multi-units!
Pluses: I am responsible for lawn cutting and snow shoveling but this is easily hired out. Do not have to worry about a vacant building as there has never been a time when more than one or two units is open. Only three roofs to worry about, three tax bills, three locations to go to. Outdoor area and common indoor area are easily accessible so do not have to make prior arrangements with tenants to check these areas. When doing pre-arranged interior inspections (smoke and CO detectors, water issues, general maintenance), can visit each building and bang it out in a few hours.
All of my units are either one or two bedroom (very important in a multi-unit), which keeps the number of residents in each to a manageable number. The buildings are nice and easily rented so I can get away with no pet and no smoking rules.
I'm currently looking to buy my first single family house rental and struggling if it is worth the effort for only one additional rent payment. Only reason I am considering it is the fact it is two doors up from my personal home. --100.6.xxx.xx
Apartment (by S i d [MO]) Posted on: Dec 6, 2017 6:56 AM
I have several duplexes and a 4-plex, but no apartments. Been trying to move that direction via a syndication/money-partner deal.
With respect to those who say, "I don't worry about vacancies because units 2-10 carry unit 1"... Well....that's sort of like saying I have 10 houses and when one goes vacant I don't worry because the cash flow from the other 9 "carry" the 10th one. Really, what is the difference? Vacancy is vacancy, whether in a SFH or a multiunit. It stinks. Work to limit and eliminate vacancy as much as possible. Every day vacant is money lost regardless of what kind of unit it is.
S i d's rant on multi-family complete. ;-)
As NE says, it's all about numbers. There is typically more drama and turnover in multi-units vs. SFH...depending on a number of factors. I really don't think there's a way to compare apples to apples except through a ruthless look at ROI. What are you earning on what you have invested and is it sufficient to meet your goals? You MUST consider all expenses: management, lawn care, maintenance, CapEx, utilities, etc. Don't fool yourself into thinking that because it's a multi-fam, you don't have to count the 50% off a month's rent for the on-site, part-time manager. It is a COST. Maybe not a check you write each month, but lost or discounted rent means less $$$ in your pocket.
What I have found is many land lords do not value their time properly and so fail the criteria of being an "investor". An investor is one who allocates capital. They do this, but they also fix stuff and self-manage and fail to pay themselves for either task. I used to do that too, so no fuss, no foul, no condemnation. Simply put, though, if you goal is to INVEST, you must account for all costs. If you want to buy yourself a job as a maintenance man and manager...then by all means do so. But be aware that's what you're doing.
Multi-fam has a lot of pluses: one site to go to. Multiple units acquired vs. one at a time, potential to "force" appreciation by raising NOI through cost reductions and/or rent raises. It also has some minuses: more tenant drama is probably the worst. I would find a tenant who is competent and capable to be a part-time assistant manager to handle the day-to-day stuff and shield you from every 1 AM call that, "So 'n so in unit 102 is blasting their stereo!"
Apartment (by Jeffrey [VA]) Posted on: Dec 6, 2017 8:18 AM
Linda, if you are waiting for the properties to be put on the market, you are missing out on many opportunities... --72.214.xx.x
Apartment (by Doogie [KS]) Posted on: Dec 6, 2017 10:45 AM
I used to own a 14 unit apartment building. Tenant drama got to be too much for me to deal with. Had a major drug user in one unit. By the time I was legally able to get him evicted, 4 others had moved too. Noise became an issue as well. At the end of the day, I decided I like my SFH much better and dumped the apartment building. --98.175.xxx.xxx
Apartment (by Robert,OntarioCanada [ON]) Posted on: Dec 6, 2017 3:27 PM
Depends on the type of construction. A concrete, block building less noise goes through the walls and floors. A concrete, block building is fire proof where can only lose a rental unit in case of a fire. With a apartment building it is essential to have controlled entrance along with security camera system where a phone line can monitor what is going on. Security cameras, controlled entrance discourages drug dealers as they do not to be on camera. Compare the price per rental unit to that of house. That being said it is a double edge sword. When things are well managed things go up faster then when things are done poorly the consequences are greater. Recommend with a landlords association where Google to find one. Doubt there is going to rent control as most know rent controlled jurisdictions rents are extremely high along with quality of the rental units is lower as a tenant has to take it or leave it. The Liberal places like the province of Ontario along with some cities in the Us already have rent control where it benefits no one. Do you anything where government gets involved in the free market things get better. No way. As the supply of anything drops prices go up it is just that simple. --50.101.xxx.xxx
Apartment (by Luba [NY]) Posted on: Dec 7, 2017 6:42 AM
Not sure if you are looking to buy apartment in a building or a whole building.
Single family scenario is not working in my area, so I am looking at apartments or multi family.
If you are looking to buy apartment in a building- you need to check if you can rent it out. Many coop and even some condo is not allowing to rent apartments or they require board approval. Also you need to check maintenance fee for your calculations. It will never go down - just up, up, up! Sometime it could be additional cost for the building lobby renovation or a new playground cost. From the other point you will have a super attendant available.
People in apartments are different ( I am one of them).
Just remind them from time to time that they lived in the apartment and, yes, they have neighbors.
Apartment (by Ray-N-Pa [PA]) Posted on: Dec 8, 2017 7:33 PM
Maybe I am missing out on something Linda. Do the hundred dollar bills look differently when they are made in Texas as opposed to a market place like Kansas or Central Illinois?
If you do want to invest in a local complex, why not start a direct mail campaign targeting out of state owners in your home town?
The energy sector is doing alright but it is not full bore like it was ten years ago so Texas should be priced alright. You should be able to positive cash flow. --24.101.xxx.xxx