Why Invest In Apartment Buildings - Step By Step By Darin Garman

Have you ever wondered, "Why should I invest in apartment buildings?" Have you ever thought you would like to get involved with an apartment investment, but did not know all of the benefits?

I have invested in many different types of residential, apartments, and commercial real estate over the years, and apartments are by far my favorite type of investment.

Here are my Top 3 Reasons to Invest in Apartment Buildings:

Reason #1. Multiple Streams of Income

By investing in apartments, you can actually create several streams of income - simultaneously from a single investment. There is no other investment option that I know of that can provide this kind of benefit without extreme risk to go along with it.

If you look at the financial statements from an apartment building, you will actually find 4 different streams of income - simultaneously working together:

1) Cash Flow
You will receive cash flow both now, and when you sell.

2) Appreciation
Your property can appreciate both organically (over time) as well as through good property management.

3) Principal Reduction
Your residents will pay down your mortgage balance every single month.

4) Tax Benefits
You get the benefits of depreciation expense, as well as being able to reinvest the profits without paying capital gains.

Reason #2. Predictability

"People will always need a roof over their heads." I have heard this statement many times when I first started investing in apartment buildings, and it still holds true today. Even more so.

When the economy is in bad shape, do you think people are more likely to let their office space go that their company is renting, or the apartment that they live in? It's pretty obvious, right? Just look around at the number of vacant office and retail buildings (no matter what market you are in) and you will see why commercial space can be more difficult - and less predictable.

A poor economy is actually a benefit for apartment buildings because of the lack of affordable housing and credit availability. Apartment owners provide a valuable service to our residents because they need a safe, clean, affordable place to live.

Reason #3. Control

There are several forms of control that I like about apartment investments:

1) The ability to invest how I want.
You can invest on your own, in a partnership, or in a group investment. You can choose the type of properties I will invest in, and their locations.

2) The ability to invest when you want.
You are not bound by any terms and conditions of a stock or mutual fund trading account. You can choose when to buy, and what to buy.

3) The ability to invest and have someone else manage the day-to-day operations.
The apartment business is one where you can have everything managed for you from the start - and you do not have to reinvent the wheel.

4) The ability to increase property value.
This is probably the #1 control reason I like. This is because with an apartment building, you actually control the property value by affecting the Net Operating Income of the property. You can quickly and easily add value to the property - both in cash flow and future value, as well.

By the way, if you liked this article, you will probably like my new report and video series, "The 7 Biggest Mistakes Investors Make When Buying Income Property."