Are you looking at becoming an expert apartment investor? Expert insights into apartment investing for 2015 show a promising year ahead, but to be sure you benefit here are some important things you need to keep in mind.
Focus on what you know best
To succeed at investing in luxury apartments or three bedroom apartments, the first thing you need to do is focus on just purchasing furnished apartments. The best apartment investors never stray away from their area of specialisation to other fields and that is a key to their success.
Avoid over leveraging
Holding too much loan finance is a great way to kill the cash flow of any business. Although it is common for people to borrow big in property investments, with apartment investing, you need to be smart about the debt. To measure your debt safety, all you need to do is figure out your breakeven-occupancy percentage.
To do this, simply add up all of your annual operating expenses and all of your debt then divide the number by your potential gross income. Talk to an expert to help you with this calculation if you don’t know how to go about it. When you can put down deposits do so, you will get better rates, which will ultimately be much better for your cash flow.
Manage your properties effectively and professionally
Property management is one of the main keys to success in apartment building investment. You can manage the property yourself, or seek the help of professionals in the field, like Crawford Park Financial, to get you in touch with the right network of financial and management support. The key point is to ensure properties are managed properly. With the right management processes in place, you will be able maximise rental income, reduce cost of operations, strengthen tenant retention and relations, enhance the visual appeal of the property, and even increase property value.
You must have a great deal of patience
It takes time to build a sizeable property portfolio. The biggest investors built their portfolios over a period of years following strategically planned processes. To make the best buying and selling decisions, you also need to time the estate cycle and market conditions perfectly. Avoid jumping in too far too soon. Get to know the game and seek out value.
Partner with the right people
The apartment investment sector is one that has lots of moving parts to it. It is almost impossible for one person to master all the facets of the market. In fact, there are different types of commercial real estate investment. Therefore, you only need to focus on doing your best in your core areas, and delegate out whatever is left to people that are experts in other areas. The best apartment investors understand the importance of valuable relationships. It will be easier to find money for deals, solve big problems and find the best deals if you are able to build the right relationship base.
Protect your investments
Planning for the worst and being happy when it doesn’t happen is one of the main characteristics of the most successful owners of apartment complexes and units. They focus on building a strong legal back bone, with insurance coverage and the use of LLCs, Corporations, TICs etc. Investors that doesn’t protect their investments are setting themselves up for a fall. Not only could they lose capital to a lawsuit or natural disaster, but, also, personal assets as well.
