Pros and Cons of Buying Apartment Buildings for Sale in Louisiana
December 19th, 2022
If you’re considering investing in an apartment building to build your portfolio, there’s a lot to know about rentals. Single family units have a lower income potential, but they are a great way to get started in real estate. Apartment buildings for sale in Louisiana have a higher income potential, but there are also a few pitfalls that could limit your earnings. Having more units spreads out your risk, but you need to be fully informed and prepared before you jump into owning a bigger apartment building.
5 Advantages of Owning Multi-Unit Apartment Buildings
Quality apartment buildings for sale can be hard to find. When you do, you’ll be filling a need in the community by providing rentals, so it’s a good business.
- Apartment complexes provide reliable recurring income. The need for housing isn’t going away, so you will always have high demand for your apartments. Even one multi-family unit that is well-maintained can support itself and your family for years to come.
- Multi-family units serve to diversify your income. When one unit is vacant, you still have cash flow from the other units.
- An apartment complex spreads out the maintenance costs. When you fix the parking lot or replace the roof, it benefits every resident. There is a lower per unit cost, reducing your expenses.
- You can include more amenities for additional income streams. Cost-operated laundry, parking space rentals, or ATMs not only benefit residents, but add to your bottom line.
- Financing options and valuation of the building is based on the financial performance of the apartment building, which can give you more options for lending and investing.
4 Cons of Owning an Apartment Building
For all the positives of owning a multi-family unit of more than 4 apartments, there are some things you do need be aware of before investing.
- Management expenses will increase. You can certainly pay a property management company or hire help, or you can use your own time, but either way, you will pay a price.
- In multi-family units, tenant turnover will be higher. You will need a system to bring in new tenants as leases end and families move out.
- You may have higher maintenance costs, even though the cost per unit will be lower than a single-family home.
- Some tenants may not treat the apartment with the same care that renters of single-family homes do. You will need to have a plan to address the ongoing maintenance costs.
- When systems of the apartment building break down, it affects more tenants. There is an urgency to make repairs. Heating and cooling units, roofs, and other repairs in multi-family units may cost more overall.
- Apartment buildings take longer to sell than a single-family unit. It is an asset, but it may not be as liquid as you need.
Our Brokers Can Help You Find Apartment Buildings for Sale in Louisiana
The Estes Group knows the real estate market in the Southeast United States. Leverage our experience when you’re looking for apartment buildings for sale in Louisiana to find the one that fits your needs. Contact us to get started.
Call us at 601-362-9633 or contact us online for help when you want to buy apartment complexes in Louisiana, as well as in Mississippi, Tennessee, and Alabama.