Things to Look for in Apartment Buildings For Sale
Looking for an apartment building? There are certain apartment buildings for sale in the marketplace which present themselves as a wonderful opportunity for investors and buyers. If you definitely wish to buy an apartment building then you can carry out a search in the newspapers, visit a broker or search online.
It is easier to invest in a single family home but you later realize how hard it is securing a positive cash flow from houses. It may be better to invest in an apartment as the investment may offer a significantly better cash flow return to a similar investment in a house.
Procedures To Follow
There are certain procedures which should be followed when buying an apartment building. These include:
- Always select those properties which provide you positive cash flow from the initial outset. The return can be will depend upon your current income minus your estimated expenses including the management fees.
- Thorough investigation and verification of the desired apartment building should be done. Look at the files for verifying the income.
- Always ask for the service agreements and contracts currently in place such as management property agreements, snow pooling, landscaping, pool cleaning services and maintenance of cooling system agreements.
- Examine the last six months records of income and expenses. Search for expenses that seem too low or income that appears too high. In case of employees, look at payroll records for accrued vacation time that may be overdue.
- Ensure an inspection of the interior is carried out. Become familiar with the place, meet the tenants and be aware of other problems demanding attention in the months or years ahead.
- Be aware of any vacant apartments listed as occupied. An inspection should be carried out looking to uncover any problems with pests, fire and water damage and any other safety issues. Be sure to employ a professional for accuracy and a personal guarantee.
- Always carry out an exterior inspection. Look for anything that may look unusual or which may constantly require maintenance. Verify your plumbing and electrical systems. Look at the exterior condition of the paint, landscaping and driveways.
- Check for any type of zoning or encroachment problems by calling the local building authorities for valuable assistance.
- Consult an accountant to decipher the account books and a lawyer to review and tend to the legal documents.
- List all the unresolved questions and approximate costs involved in order to rectify them.
These are some of the points to be kept in mind when considering purchasing apartment buildings for sale. For peace of mind when dealing with these matters, it is better to enlist the services of professionals. In all situations there is a substantial amount of capital involved. It is worth the extra amount paid to these professionals for the services to ensure the investment is a financially beneficial one.