Pros and Cons of Owning Apartment Properties

November 29, 2019

If you’re big on investing, you should be putting 20% of your investment capital into real estate. The best way to do this? Look into owning apartment complex properties. Apartment building investment in Denver is a great source of multiple incomes and consistent stream of cash flow, and it’s considered easier to finance and rely on than just single family homes. It will bring in a definite amount monthly, and has many other great aspects to look into.

Pros Of Apartment Real Estate

There are several reasons why apartment properties have been such a great option for many real estate investors! Not only are they fairly easy to purchase and finance, the many other benefits these properties offer a landlord really add up.

Tax Benefits

Luckily for realtors and investors, the government has proven to highly favor apartment property owners. You will have a ton of ways to get credits and benefits on your taxes, including all costs related to your building being allowed as a write-off. Yes, this includes insurance, mortgages, and other costs you’ve had to pay to keep the apartment property up and running through the year! You will also get a deduction of 20% for the perks of having a qualified business in your name.

Useful Industry

Think about it – when are people not needing a place to live? Everyone has to have a home somewhere, and rental homes are more popular than ever in today’s trying economy. Denver, like the rest of Colorado, have been growing at a rapid rate as more and more people move to the city. Because of this, the demand for apartments has skyrocketed, so you’ll have an easier time finding renters than you would buyers.

Lots Of Flexibility

Between building equity and multiple income streams, you can be pretty flexible with how you choose to operate your buildings. You set the rent, the rules, and the deadlines. You also are in charge of how to enforce them, and state laws are on your side. It’s way easier to be in control with apartment properties than it is a house or retail stores, which is a great selling point for this form of investment in real estate.

Cons Of Apartment Real Estate

With all great things comes a couple of disappointing downsides. You will run into a few challenges or struggles that some may consider not to be worth the hassle. Take into consideration these negatives sides of apartment properties in real estate investment.

You Rely On Your Tenants

You’ll need to be sure you get good tenants, unless you want to waste time chasing down your payments each month.

Maintenance & Upkeep

If something breaks down or needs repaired, it almost always falls on your shoulders to fix. Sometimes you can hire a third-party, but you’ll need to pay for it, and not all repairs or replacements will be tax deductible, and you may get late-night calls about broken furnaces or water lines.

Environmental Dependency

If the quality of the neighborhood declines, so will your ability to charge a higher rent.