Owning and leasing an apartment building can be a great way for a landlord to generate additional yearly income. However, prior to buying an entire apartment building, it is important that landlords know what they are getting into. Without the proper knowledge, buying and leasing and apartment building could cause more stress than anticipated. Harland Property Management offers information about buying an apartment building and important tips to help guide prospective buyers through the process.
Start by making sure your finances are in order and calculate the time and cost you will need before you will start to see a profit. Then, check out the vacancies in the area where the apartment building is located. One rule of thumb is to not purchase a building if more than 20 percent of the buildings in the area are vacant; otherwise, you are going to have a difficult time finding tenants. Ensure that you have also planned for common repairs, such as paint touch-ups, and be sure there is an emergency fund in place for those larger, unexpected repairs.
One other point that is often overlooked is the building’s safety. Make sure to hire an unbiased inspector with a solid reputation. Things to make sure he or she looks for include a weak or cracked foundation and any damage to load-bearing walls. You should also make sure the inspector checks that the electrical wiring is up-to-date and that there are no signs of mold or other hazards. For more information about apartment management in San Diego, click here.
Additionally, do not be afraid to invest extra money in professional advice and services. Consult with real estate agents in the area who are familiar with costs and local regulations, and who can provide you with valuable information that you might not get elsewhere. Make use of a certified public accountant to make sure all your finances are in order, to confirm that you can comfortably afford to make the purchase and to get any tax-saving tips. Finally, make sure to contact an attorney for legal advice. There are often a lot of little details that have the possibility of being overlooked, especially at the county level: licenses, permits, fees, taxes, etc.
After you feel confident in your decision to purchase an apartment building, you will need to consider how you are going to attract renters, minimize vacancy and successfully manage the collection of rent, maintenance and the property as a whole.
For those who have never managed an entire apartment building or feel overwhelmed by the process, consult with a professional property management agency such as Harland Property Management. We specialize in apartment management and will help you with everything from legal paperwork and filling vacancies to maintenance and tenant evictions. Interested? Click here and see what some of our clients are saying about our property management services!