October 20, 2014 October 20, 2014

An apartment building can be a lucrative investment, if done right.

A good investor seeks out the best advice, gathers all the information he or she can and then chooses the right building.

A great investor will get to know local real estate agents and other investors—and find a mentor. Savvy investors won t allow emotions to govern any final decisions; they ll do the math and ensure they can afford any loans.

Here s how to make a great investment in an apartment building.

Professional Advice

Find the right professionals to help you through the process, especially if this is your first time buying an investment property. The more expert eyes on your deal, the more likely it is you ll cover all your bases.

• Real estate attorneys: Don t write your own legal documents. A real estate attorney should write or review all purchase documents. They ll be responsible for things like managing escrow. writing repair requests and investigating the title on the property.
• Inspectors: Take the time to find an inspector who has experience with commercial properties. Before you commission an inspection, discuss what the inspector will check and make your expectations clear. A standard inspection will assess the condition of the building structure and electrical systems. A standard inspection won t check for things like a wet basement or faulty pipework underneath the building. You may want to commission extra checks for these.
• Accountant: Basic bookkeeping falls to you, most likely, but the ins and outs of local and federal taxes can prove a minefield. Requirements can constantly change. And you ll want a professional who can ensure that your checks balance.
• Real estate agent: A local agent will have invaluable information on the areas you want to invest in, and a REALTOR® will generally have a greater choice of properties on the market. A good agent will represent you when it comes to making an offer and advise you on your options based on their extensive knowledge of what the market can bear.
• Property management companies: Most investors don t manage their buildings personally. A good management company will keep your building in good condition and ensure you get your rent payments from tenants on time. For an investor with multiple properties—or a day job—a property management company can save the owner a lot of time and headaches.

Do the Math on the Apartment Building