Some people purchase condominiums and rent them to individuals as apartment rentals. You have to be careful prior to purchasing a condominium for rental and make sure the bylaws do not prohibit rentals to third parties. Make sure that the association does not prohibit renters.
One of the negative aspects about this sort of commercial real estate investing is trying to get qualified renters who will pay their rent on time. It can be very tine consuming to evict someone who is not paying and they may, in turn, end up doing substantial damage to the property. It is always a good idea taking at least a month of security deposit from any renter.
Another negative aspect about this type of commercial real estate investment is that renters do not necessarily take care of property as they would if they owned the property. You will most likely have to do some repairs when they move out. Some people leave the place a mess that requires substantial cleaning.
You have to know how to do basic repair work on a building in order to make this type of commercial real estate investment work for you. You can also choose to have one of your renters, who is handy, to get a discount on his rent if he maintains the building and acts as custodian.
The positive aspects of apartment rentals is that you can choose to live on the premises so you can monitor the activities of the renters. You can also make any repairs yourself and save yourself quite a bit of money. The rent the others pay may even cover the mortgage of the property, leaving you living rent free and still owning the real estate. If you manage to stay in the building for a long period of time, you may actually pay the building off and, if it is in a desirable area, you can make substantial equity on this type of commercial real estate investment.
Apartment rentals are not for everyone. You have to like to work with people and it is helpful to know how to do basic maintenance. Basic maintenance includes fixing leaks, plumbing problems and even some electrical problems. Other, more substantial problems, may have to be contracted out. This is why it is so important to get a thorough property evaluation before you purchase this type of commercial real estate investment.
Another tip when dealing with apartment rentals is to make sure that you run a credit check on each individual who tries to rent an apartment. You will want to make sure that your renter pays you each month, otherwise you will have to initiate eviction proceedings through your attorney.
Mark Moebius
CEO
MILJONAIR Development
MiljonairDev.com
636.300.9000
3451 St. Albans Rd. Suite 5B
St. Albans MO 63073
