Investing into an Apartment Complex- Pros & Cons

Investing in Apartments

Investing their capital into crowd funded projects and getting good ROI has become lifeblood of many, and is for sure a lucrative business. In recent times, we have seen many such projects being launched and carried on by gigantic builders and Real Estate tycoons. However, we have witnessed another problem that beginners face while investing into an apartment complex and that is they are not sure is it worth it or whether they are going to get benefits from this investment or not. The sole purpose of today post is to elucidate the pros and cons of such investment endeavors in favor of the end-user, or entry-level investor. We have also compared this investment method with others like mutual funds, stocks, etc. to name a few. So without further ado, let’s dive into our main topic.

Pros of Investing in Apartment Complex

First of all, we will discuss the pros of investing into an apartment complex. Some of them, we have compiled and other may be done by digging through the topic in-depth. Likewise, the benefits of investing in apartment building are many, and are listed below;

• Flowing cash capital

Many investments require a greater period of time while getting mature and start paying off to the investors; such is not a case with investing into an apartment complex. You can start getting your chunk of revenue from the next month, week or even the next day. Real estate investments are considered beneficial in term of providing and maintaining an ample cash flow for the person who has invested into them.

• Tax incentives by the state

While there are many businesses that provide great tax incentives to the investors, investing into real estate apartment building does the same. Flexible and lucrative tax policies by different governments made this a great investment mode. Looking at the way government allures the masses to invest into real estate by giving tax leverages, it is a known fact that this thing is definitely going to take you somewhere.

• Exponential growth in equity

Investing in real estate complex is considered to be one of the best investment methods as it doesn’t grow like 1,2,3,4,5; it grows like 1,2,4,8,16. In our opinion, this is due to the reason that population grows exponentially, and real estate is directly proportional to population. That’s another reason that this form of investment in considered to be lucrative in the investors’ community.

• An asset for lifetime

Investing into a real estate project is not like other investments where you fear losing all your capital, or getting reduced turnout of your investment, rather every passing year adds to the value of your investment. This kind of investment doesn’t serve only single generation, rather it goes from heir to heir and let’s many generation gain benefits from it.

Other features that will add value to your investment are that banks seldom refuse loans for investing in real estate as this is the most solid form of investment, and fulfills all the needs of paperwork by the bank. The second factor is you can easily find partners to invest with you, as the business is crystal clear and has no ambiguity of any kind in it. in this way you can find a huge number of investors willing to invest with you, enabling you to buy more or bigger of it to maximize your growth and potential.

Cons of Investing in Apartment Building

Since we have discussed the pros of investment into an apartment complex, let’s discuss few of the cons that are related with such investments.

• Time taking process

Investing into real estate apartment building is a time taking process, if you invest in some under construction project that will take months or even years to complete. Unlike other investment modes you can have to wait for this investment to get mature and start paying you off. If you have extra capital that you can fix for a certain period of time then you should definitely go for investing in apartment real estate.

• Greater liabilities

Another thing that is considered to be a con is that you have to pay greater liability on your belonging in apartment complex. Insurance policies, bank loan installments, and hefty bills all fall in the category of such liabilities. In addition to these, the maintenance cost that is a recurring cost when gets added to the monthly bills won’t be a welcomed situation. You must be a master in numbers in order to get most of the benefits from investing into a real estate apartment complex.

• Vacant apartment for rent purposes

For all those who have bought an apartment to rent it out and take rent as a source of income, the worst nightmare seems to be a vacant apartment. In this way it breaks the chain of cash flow and isn’t much welcomed situation. To save oneself from such a situation, the landlord has to invest more time into looking for potential clients after the end of every agreement cycle, which is also a con in our opinion.

• Hard liquidity

Unlike other investment modes you can’t buy and sell apartments on your mobile app with a single click, rather you have to follow a long procedure and fill up a bulk of paper work for this purpose. This is a time and energy draining process as the apartment may require a greater amount of time to get sold. Finding a potential buyer and arranging a house visit every now and then is also not a much appreciated chore.

Conclusion..

Investing into an apartment complex is not everyone’s cup of tea. It requires a lot of time and skills like risk taking, working energy and knowledge of numbers. If you have these skills in you then there is no other investment option better than this for you. As investing into an apartment building doesn’t only give provide you with great income source, it can be owned for years by your heirs for a smoother and comfortable living experience.