Not only do apartment buildings generally enjoy healthy long-term appreciation potential, but they also often produce positive cash flow in the early years of ownership. But as with a single-family home, the buck stops with you for maintenance of an apartment building. You may hire a property manager to assist you, but you still have oversight responsibilities.
In the real-estate finacing world, apartment buildings are divided into two groups based on the number of units.
Four or fewer units you can obtain more favorable finacing options and terms for apartment buildings that have four or fewer units because they're treated as residential property.
Five or more units complexes with five or more units are treated as commercial property and don't enjoy the extremely favorable loan terms of the one-to four-unit properties.
Not only do apartment buildings generally enjoy healthy long-term appreciation potential, but they also often produce positive cash flow in the early years of ownership. But as with a single-family home, the buck stops with you for maintenance of an apartment building. You may hire a property manager to assist you, but you still have oversight responsibilities.
In the real-estate finacing world, apartment buildings are divided into two groups based on the number of units.
Four or fewer units you can obtain more favorable finacing options and terms for apartment buildings that have four or fewer units because they're treated as residential property.
Five or more units complexes with five or more units are treated as commercial property and don't enjoy the extremely favorable loan terms of the one-to four-unit properties.