Did you know there are 2,654 new renters every day in the United States? That’s a lot of rental income you could access if you own an apartment building. If you’ve been researching investing options, you’ve probably considered purchasing a multi-family building.
Buying a large building can be a wise investment. But only if you know what costs you’ll be faced with after the property is yours. When you’re considering apartments for sale, make sure this is a wise investment.
So, how much does an apartment building cost? If you’re thinking only of the price of buildings for sale, you’re missing out on vital information. Read on to learn the true costs of buying an apartment building.
The most obvious cost would be that of the multi family building that you purchase. Don’t forget inspection and contract fees when looking at apartments for sale.
You’ll want to factor in how much it will cost you if you have tenants leaving your units. When a tenant leaves, you won’t have their rental payments as income. You’ll also have the added cost of fixing up their unit to get it back on the market.
This is a cost you’ll be happy to pay. Property managers save you time and energy when working with tenants. They will be available to handle maintenance issues and late payments.
Experienced teams like Reedy and Company help you find profitability. They’ll do so by finding screened tenants and keeping your property well maintained.
The more units you’re working with, the more likely something may go wrong. You may have to pay for plumbing, roofing, or appliance repairs.
The longer you wait to repair issues, the less perceived value your building has. Therefore, it’s important to work with property managers. Or you’ll need to commit to staying on top of the maintenance yourself.
To have an advantage and keep up the value of your property, you can offer amenities. This may be a communal laundry room. Or perhaps you rent out the basement as storage spaces.
This will cost you to set up, but you can also make a profit over time by charging to use the laundry or storage spaces.
Depending on the property there may also be communal spaces to upkeep. Some properties have pools, playgrounds, or rec rooms for the residents.
You’ll want to insure yourself against liabilities or accidents. This cost may feel like a lot at first. But you’ll be glad should you face issues with difficult tenants or building upkeep later.
You will owe taxes on your rental income. There are deductions you can make, however. For example, you can deduct cleaning costs, insurance costs, and mortgage interest. You can also deduct the costs of advertising your open units in order to find tenants.
How Much Does an Apartment Building Cost?
Next time you hear someone asking “how much does an apartment building cost?” you’ll have the answers. The costs are higher than just the building itself. But the benefits are big.
By investing in an apartment building you can make money back via rental income. You can also charge for amenities and deduct costs from your taxes.
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