3 Things You Need To Invest In Apartments

There is no better time in history to invest in apartments. It is an investment with a measure of control, and it can create both monthly cash flow and build equity at the same time. There is no quicker way to protect and grow your wealth.

You will need an effective property manager keeping tabs on your building daily. If you manage your manager diligently, you will create financial freedom for yourself and your family. Using professional property management frees up your time to look for deals.

The beauty of buying an apartment building is that apartment investing is based in concrete market fundamentals. Don’t get me wrong, I don’t hate Wall St., diversification is important in any portfolio. If you buy your deal right, you can weather virtually any storm.

Apartment Market Makeup: Between baby boomers not wanting to deal with the upkeep on a home and millennials choosing to stay mobile and not be tied down to a mortgage, the next 5 years (at least) are bright for apartment market demographics.

A word of caution: the upside of apartments is clear, the ability to scale your multifamily real estate business quickly, and the power of the demographics driving renter demand. However, the mistakes can be bigger and more costly. It is crucial that your surround yourself with the right team.

3 things you’ll need:

Money: Apartment investing is not a no-money down real estate strategy. Plan on the down payment being about 20 – 30% of the purchase price for a good rule of thumb. If you are interested in apartment investing but have a limited amount of time, look for a partner that can scrub the deals down so that you maximize your minutes.

Experience: You need to make sure that the team that you surround yourself with can fill in the gaps of your own knowledge. When presenting your deal to a potential lender, make sure to emphasize any real estate experience you’ve had. No real estate experience? Have you managed a project/account/team? Tell your story of your expertise. Do you have an experienced local property manager engaged? Lenders will always feel more comfortable with an established property manager engaged prior to purchase.

Time: Here’s where the hustle pays off. Many investors have the liquidity to bring to the table but no opportunity to find the deals with value. This where the individual with the entrepreneur mindset can create a business. If you can become the expert that can bring the deals to the money, you can scale your real estate investment business quickly. Time is the one asset you can’t create more of. Use this to your advantage and come the deal gatekeeper.

Whether you have all three of these or none of them, keep in mind the golden rule of apartments: what you don’t have, you can partner for.

The beauty of the apartment market is that the fundamentals are solid and based in demographics that continue to grow. If you have one of the fundamental building blocks of investing in apartments, don’t overlook the power of PARTNERING. Don’t let ONE missing piece cause you to miss out on this opportunity.

How we help investors: Elite Apartment Coaching helps beginner, intermediate and sophisticated real estate investors actively acquire apartment buildings, creating income-producing properties.

We host exclusive training events for private real estate investors to get them to the next level in their investing business. Whether you are just beginning, have done some deals, or are a sophisticated investor, we are here to drive results so you can play an even bigger game.

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The Benefits of UK Land As a Real Asset to Investors

A lesson in real assets has played out in the prices of silver and gold bullion in the past several years. Silver was priced at under £3.43 per troy ounce in 2003, climbing to £9.20 by 2009 and £14.74 by 2012. In 2013 the price began to drop, falling 36 per cent that year with an approximately 7 per cent recovery by mid-2014. Gold, trading as high as £1150 per ounce in 2011 dropped to £1027 by the end of 2013 and £709 by mid-2014.

The rise and fall of precious metals markets helps illustrate a few points about real assets. One is that a savvy – or lucky – investor in real assets can experience large growth in a relatively short period of time. Second, some asset classes can experience precipitous declines in an equally short period of time. And, the investor does not have very much control over these price swings.

An exception might be with land, particularly in raw land found in some parts of the United Kingdom. For example, property funds provide a means for investors to participate in real estate.

Notice the key difference in land versus precious metals: land is a real asset that can be improved upon. And in that improvement comes a remarkable value increase. Metals (and other commodities) are subject to global events, the rise and fall of market-traded securities, and even rumours and emotions.

The external factors affecting land, which should be foremost in the minds of investors, include what is happening in the UK that would lead to a rise in prices. Those factors are:

• Burgeoning population – From 2001 to 2011, the net population in the UK grew by 7 per cent, far outpacing almost all of Europe. Young families need homes, but we are woefully short of what’s needed to accommodate these many people.

• Historic underbuilding – For many and complex reasons, the numbers of homes needed to house our growing population increases by about 200,000 per year and yet we’ve been building fewer than 100,000 dwellings. This shortage was made worse in the recession that began in 2008 and has only begun to catch up since 2013. Still, demand is expected to outstrip supply at least through 2020.

• Rise of the rental class – The portion of working adults who rent instead of owning has increased by more than 40 per cent in just ten years. This signals a shift in the types of homes being built.

• Government schemes to support building and buying – The Help to Buy programme from the Government has indeed stimulated more home buying since being introduced in 2013. Contrary to the scheme’s detractors, most transactions that resulted are modestly priced homes and first purchases.

Strategic land developers are most successful when they purchase well-situated land – near areas where the local economy supports growth – that require a use change designation from the local planning authorities. With that, as well as through the development of infrastructure and home building, the increase in price per hectare is as much as a factor of ten.