Are you considering an investment in multifamily apartments for sale in Texas? Here’s how to find and finance great apartment property investments.
Real estate is known as one of the top wealth-building tools. People always need a place to live. Multifamily apartments are a particularly popular choice as more and more people are finding they are unable to afford to buy a home.
37% of Americans live in rented properties. As of 2017, that’s 43,837,496 families. And, multifamily apartments aren’t just for 20-somethings. 23% of Americans between the ages of 30 and 44 live in some form of rented residence.
The need for multifamily apartments continues to rise as the economy and real estate market continues to adjust. Owning an apartment complex provides additional streams of income while also helping residents enjoy a place they can call home.
Here’s a quick guide to why investing in multifamily apartments in Texas can be profitable.
Guide To Investing In Multifamily Apartments In Texas
Speaking on real estate’s viability as an investment, former President of the United States Franklin Delano Roosevelt claimed, “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”
That statement was made over 80 years ago and still rings true today. When managed properly and with care, multifamily real estate’s earning potential still delivers a solid ROI.
Let’s begin by looking why multifamily real estate is such a solid investment.
Why Multifamily Apartments Make Great Investments
Many investors look to multifamily real estate as an alternative to the stock market’s volatility. It’s also a great fit for those looking to have more of a hand in their investments, as opposed to the passive income generation of hedge funds and stock portfolios. It can also be completely hands off, should one choose full-service property management services.
Investing in multifamily apartments is an opportunity to increase equity and generate a monthly income stream not only from rental income but also from ancillary services including concierge services, specialty streaming services, wine lockers, bicycle rental, car service and more.
Here are a few more reasons why investing in multifamily apartments is such a popular investment strategy.
Texas Has No State Income Tax
One of the most important reasons why people are moving to Texas is because of the absence of any state income tax.
Instead of generating revenue through income tax, it generates it through property taxes. This makes Texas one of seven states in the U.S. in which residents are not required to pay state income tax.
Even though some homeowners complain about the disproportionate income generated by the state through property, the overall tax burden on individuals in Texas is much lower than other states.
Furthermore, there are also a bunch of tax incentives for start-ups and small businesses to relocate to Texas. What do all these people coming to Texas need? A place to live!
Create A Portfolio Ladder In Less Time
Trying to become a real estate mogul with single-family homes can be a lengthy and time-intense pursuit. Multiple multifamily apartment properties give investors an opportunity to cultivate a diverse real estate portfolio in a fraction of the time. Leveraging and laddering a multifamily portfolio is an art. When done properly, one can quickly grow from a single apartment complex owner to a multiple apartment property portfolio very quickly. Sometimes, value deals can be bought in multiple packages picking up three and four properties at a time. These are often done off-market and move very quickly. Being connected with others in the industry is crucial. Cash can be king when it comes to down payment, and along with an approved letter of intent with proof of financing, allows prudent investors to move nimbly through the best deals.
Hire A Professional Property Manager
Multifamily apartments become an even better investment when you can afford to hire a professional property management company to tend to the daily duties. Their years of expertise often result in instant savings when deploying time-proven processes with a trained eye for hidden value.
A professional apartment property management company takes the pressure off of property owners by performing tasks below and providing detailed monthly reports:
- Providing a continuous stream of qualified residents
- Conducting professional screening interviews and background checks
- Rent collection
- Eviction processes
- Property maintenance
Property management services can quickly pay for themselves when you think carefully about all the steps and liabilities involved in these tasks. Time is money after all. Process improvement with decades of experience can clean up a marginally performing property in record time. Having a good property manager on your team can quickly grow your multifamily portfolio.
Navigating Multifamily Financing Landmines
You’ll need to have your down payment, which is often 20% of listing price. Then, it’s time to shop for loans. This can be a daunting task if one is not versed in the small fine print of multifamily loans. This is one area where it is helpful to have an experienced guide that can help to rule out potential predatory lending practices and identify hidden fees that can quickly put owners in the red.
Working with an experienced property management firm that can deploy capital and business expertise to economically improve return on investment from real estate assets and use these same efforts to improve the quality of life for asset owners and residents, results is a better world for everyone.
Benefits Of Owning Multi Family Apartments
Resident turnover can actually be a good thing. Instead of being locked into a set rental rate for years, the ability to reset rental rates each time a lease is renewed allows an owner to cover increasing costs.
When managed properly and value is added to the property in the form of additional amenities and services, rents and fees can continue to increase year after year. A good property manager can help guide on these value-add amenities and services. When your apartment complex is in an area with a large transitory population, like college students, and/or located in a desirable location, your investment only become more valuable with the passage of time.
Finally, owning a multifamily apartment complex as an investment lets you help people enjoy a living space of their own while adding value to the community at large. It’s a win-win situation for everyone.
The barrier to homeownership certainly doesn’t seem to be diminishing any time soon. This barrier drives more need for apartment homes for rent. Owning multifamily apartments as an investment lets you be part of the solution.
Considering Investing In Multifamily Apartments In Texas?
We believe that ethical investing in real estate is one of the paths towards building a better world, while still serving as a solid investment. If you’re ready to begin your journey towards being a landlord, or if you want to increase ROI on your existing apartment portfolio, give us a call us today at (713) 559-6975 or drop us an e-mail to info@www.betterworldllc.com.
Better yet, come visit. At Better World Properties LLC, we love nothing better than to talk apartments.