One of the biggest difficulties about apartment buildings is finding a good one.
Apartment buildings are a business… they take time and effort in terms of management, and overseeing cleaning, painting and perhaps carpeting between tenancies, and maintaining all of the heaters, ovens, washers and dryers etc on the property. Showing an apartment takes time. Making poor choices or mistakes obeying to fair housing or other laws can mean lawsuits. These things can be much more manageable on a single family residence.
I mention the business angle above as too often that time investment is overlooked.
On-site management costs money… and external management companies can be quite professional but they can’t cut corners hiring handymen to do major repairs…or doing them internally like an entrepreneurial construction orientated person can.
Now, if you paid the right price you could afford a mix of hiring people and making enough income to justify your time.
I’ve found that in the better areas experienced operators tend to hang onto properties forever. Some of that could be that as it isn’t easy for the entrepreneurial type to qualify for new ones in most market conditions … some build the complexes for themselves as contractors…
Units available in areas like Fresno or Sacramento can come cheap enough on paper, but rents get suppressed as there is little barrier to entry in building new larger complexes that compete with the older complexes..and older rental areas very often see crime rates rise as people with less steady jobs or disadvantaged family members, logically can afford the less expensive apartments and cause problems for the majority of the upstanding people within the complexes.
Any owner of apparment buildings must have a stomach for trying to collect rent from people who have experienced economic upheavals and are unable to pay, whether luxury apartments or affordable housing.
It is easy to internalize all of that.
Businesses of all types are about solving problems… if you look at owning apartments as a business with its own set going in, and can enjoy the construction and maintenance and bear the human contact with people in need, owning units can feel quite Rewarding
Owning units was rewarding for me, both financially and personally.. however it wasn’t a part time business.
I’ve said a lot above and perhaps it should be broken up into multiple posts soon.