Spoken Apartment Rental

When most people hear about the millions of dollars investors make buying and selling real estate, the majority of them think about homes and duplexes. That’s because nearly everyone starts in the single family market.

But they don’t have to. The main reason investors start out buying homes is because they’ve heard all the stories or watched an infomercial where some guru is pitching the latest and greatest “no money down” technique. Buyers think they can purchase homes with no cash using a variety of methods including foreclosure, rehab, fix and flip, subject to, lease option, partnerships, wholesaling and more. And they’re right-you can buy homes that way. But you can do the same thing with apartment buildings.

The benefits of investing in multifamily properties are out of this world. I haven’t found a single reason not to invest in apartment buildings. Let’s review five of the top reasons apartments simply make more sense.

Apartments almost always provide a more affordable housing option:

I can’t get into all the economics explaining why apartments provide a more affordable housing option in this article because it would turn into a book. So let’s try to simplify it. The difference between the amount of rental and mortgage payments consumers spend each month is what I call the “gap”. Picture a bar graph where the average rent is $600 per month and the average mortgage is $1,000. The difference is the gap. As the gap increases fewer people can afford to purchase a home. There are only two ways the gap can get bigger. First, the mortgage payment increases or second, rental rates decrease. Most of the time rents do not decline, at least not significantly.