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How to Build Your Apartment Investing Portfolio

Are you looking to expand your investment in multi-family properties? Here’s how to build your apartment investing profile and generate wealth.

Texas’s real estate market is booming right now, with four of the five fastest-growing cities being in Texas. This has led to many investors looking at apartment investing in Texas as a way to build their portfolios.

Building your investment portfolio with apartments can be a very lucrative way to invest your money, and can be a passionate way for many to build wealth and stability for their future.

However, building a strong portfolio of apartments can seem like a daunting process. Many people want to get started but may have limited funds, no knowledge of the industry or simply don’t know where to start.

Don’t worry – you can do it! This article will take you through some of the fundamental steps to understanding how to build your apartment-investing portfolio in Texas.

Understand Your End Game Goal Before Investing

When you consider any investment, it’s first worth identifying exactly what your goal is for the investment. You would be surprised at how many investors do not assess this very important step.

Are You Solo or Do You Need to Pool Funds with Other Investors?

Depending on your cash resources, you may be able to qualify for funding if you have ample down payment funds. If not, pooling your resources with other investors can prove to be a wealth-building strategy as you move up the multifamily investing ladder. Networking with professionals such as the Better World Family of Companies can help guide you to the right niche for your current multifamily investing goals.

Are You Buying Apartments to Flip or Buying Apartments to Hold?

Understanding the intricacies of the current multifamily market and submarkets is key to determining your best investing strategies. These dynamics change and must be monitored regularly. A value play bought at the right price and turned quickly fits in certain markets. The value of real estate increasing over time is also a factor to consider for long-term wealth building strategies.

Why Invest in Multifamily Properties in Texas?

Texas is an incredible location to consider apartment investing. As outlined in the opening paragraph, the US census in May 2017 reported that four of the five fastest-growing cities are in Texas. The census reports that overall, cities in the south continue to grow at a faster rate than that of any other region in the US.

For example, Conroe, Texas, which is near Houston, was the fastest-growing large city in 2015-2016 at 7.8%, 11.8 times the national rate of growth.

Texas Has a Favorable Regulatory Environment

Texas is a state that encourages businesses to make Texas their home. Texas has no state income tax, which makes it very attractive to businesses and individuals.

The state also operates no rent control and often welcomes development, which can be beneficial to consider in the future of your property development career. Texas has been at the top of the multifamily owned list for years, and many consider it one of the best places for apartment investing in America.

It’s easy to see why Texas is on multifamily investors’ radars in 2018.

Multifamily Perks Investment Benefits

It’s very important to understand what perks and amenities work in what markets and others that do not so that rehab funds are not wasted on amenities or perks that are never used. Certain perks are hands-down winners with apartment residents.

Multifamily Can Be Easier to Manage

Compared to single-family homes, it can be much easier to manage many apartments at one time. Renowned investor Brad Sumrok explained in a radio interview that single properties can be a lot more work than hundreds of multifamily units.

When investing in single-family homes, you often have to wear many exhausting hats. You need to do the property management, you need to meet clients to sign leases, you collect the rent, and if the tenant doesn’t pay, you to have to put steps in place evict them.

All of these things can take a lot of time and produce incredible stress. When you own apartments and invest in professional apartment property management, you have an experienced buffer between you and apartment residents. Many of these potential problems never arise when professional management is put in place.

The cost to hire professional property management quickly pays for itself by reducing risk, increasing return on investment and raising rents when appropriate depending on the performance in each submarket.

How to Get Started in Apartment Investing

Many people believe getting funding can be very hard or even impossible. You may want to start investing in multifamily but not have the money to get going.

The trick is finding a good deal, with great returns, which may provide:

  • Double-digit, average annual returns
  • Double your money in 5 years
  • Double your investor’s money in 5 years

If you have that sort of potential investment, people will be interested in investing with you. There are three ways you can get started apartment investing.

Buy an Apartment Property by Yourself

If you have an entrepreneurial spirit, and you can find a great apartment deal, you can hire professional due diligence and raise the capital yourself.

Passive Apartment Investing

Many people take the route of passive apartment investing which, because of the economics of scale, can be a more diverse investment. A syndication model pools funds together from multiple investors to invest in larger and more diverse property portfolios that can help to minimize risk over a variety of properties and submarkets.

This is a passive way to apartment investing and can often require little input other than initial investment, yet can deliver double-digit annual returns.

Be a Syndicator by Putting a Deal Together with Others

The last way to get started is instead of investing with a syndicator, is to be the syndicator. While this can be a great way to increase wealth over time, and leverage other people’s money, there is also increased risk.

Unlike passive investing, you’ll have much more control over the success of your venture. Hiring experienced apartment due diligence services and professional apartment property management services such as those offered by Better World Properties LLC can prevent costly mistakes.

Want to Find out More About Multi-Family Investing?

To find out more about investing in multi-family properties in Texas, or to assess current returns on investment or review apartment process improvements with your existing Texas apartment properties, give us a call.

Better yet, come visit. We have some great apartment deals across the Lone Star state. Plus, we just love to talk apartments.

(713) 559-6975

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