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Apartment buildings are a great way to diversify your real estate portfolio. When you’re new to commercial properties, it can be difficult to know how to evaluate the income and expenses against your investment. Here are four questions to ask when looking at apartment buildings for sale in Mississippi to help you analyze whether the purchase makes sense or not.
Everyone has a story, even apartment buildings. The property’s history can tell you about its reputation and any past problems to give you a better idea of what you may need to overcome to turn a profit. Dig deeper than just asking how long the current owner has owned the property. Find out who the previous owners were and why they sold. Ask about how this property fits into the community.
Ask this question when you’re inspecting the apartment building to find out their maintenance system. If they have a good answer about when the AC units or heaters were cleaned and maintained, you’ll know they put maintenance as a priority. If they hem and haw over the answer, they probably defer maintenance, which means you may need to allocate more money toward fixing issues if you take ownership. Follow up with questions about other work needed on the property but remember that you may not get the whole story.
Knowing the occupancy rate is good, but you’ll want to know how those people came to rent the apartment. What kind of due diligence was done on screening current tenants, rental histories, income requirements, work history, credit scores, etc.? This can tell you whether tenants are going to be long-term or whether you’ll need to be prepared to deal with late payments or evictions when you take over.
This is a valuable question because you’ll learn the pain point behind the sale. This can help you make a deal, but it can also help you learn what is going on with the apartments. An older owner who wants to retire is much different from an owner who is dealing with burnout. The latter could identify that there are more problems with the apartments than you can see on the surface. It could also mean that the owner overworks. You may need to ask this question more than once to get the full answer, but you’ll get more details about what you may be getting into.
Apartment buildings for sale in Mississippi are often good investments when you get the right information before buying. Enlist the services of a qualified real estate broker who knows multifamily real estate. The Estes Group can help you choose the right property for your goals and dreams.
Call us at 601-362-9633 or contact us online for help from our multifamily real estate brokers when you want to buy property in Alabama, Mississippi, Tennessee, and Louisiana.
