Multi Family Properties  

Apartments have always been the basic necessity element for housing. In general terms the affordability of housing forces many people to rent. This creates a very attractive and the most competitive marketplace in the commercial/investment field. There are more apartment buildings than office, retail, and industrial properties combined. . The current economics conditions, low affordability of single family dwellings indicate that the demand for apartments anticipated to be strong and will probably increase.  

Apartment Buildings are Categorized as follows

Apartment Buildings are Categorized as follows

• Garden Type Apartments:
  
• One- and two-story buildings, a courtyard or single-family-type setting.
  
• Walk-Up Type Apartments: Three- to five-story buildings, no elevator; mixed single and multi-family units.
  
• Mid-Rise Apartments: Six- to ten-stories serviced by elevators; mostly located in  inner city or dense suburbs.
  
• High-Rise Apartments: Buildings with more than ten stories; underground parking and security; full service; standard plan with limited unit types.

The Following Factors should be considered by Apartment Investors

The Following Factors should be considered by Apartment Investors

• Purchase and financing of apartment buildings can be highly leveraged. More so than commercial properties.
• The tax shelter benefits. However, investors as a general rule do not purchase apartments for the purpose of tax benefits.
• .The resale market for apartment building is generally good.
• Investors need not to be sophisticated to own and operate apartment buildings.
• The apartment building value is determined by: occupancy, income, expenses, financing, etc. and can be affected by the owner.
• Unit mix must be matched to the demographics of the area. Apartments that are 2 or 3 bedroom are more likely to succeed in family areas than studio units.  
• Apartments are patronized by individual/s, not by key anchor tenants
• Apartments may be subject to government regulations such as rent control.
• Institutional and seller financing is more available.
• Apartment visibility and close proximity to major highways, labor, transportation, shopping, and residential housing tracts are good elements.
• Pricing apartment buildings involves the use of the gross-rent multiplier, price per square foot, price per unit (CPU), and capitalization rate as "rules of thumb,"
• Deferred maintenance can be extremely costly and detrimental to achieving investment objectives.
• Ratio of land to improvements affects the amount available for depreciation, and this affects the tax benefits associated with the property.
• If the owner is required to pay utilities, it will substantially affect the expenses connected with the property.
• Parking conditions and the number of spaces available, as well as the types such as: covered, carports, open area are very important.