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Steps to Buying an Apartment Complex

Posted on: August 9, 2019

Steps to Buying an Apartment Complex

Purchasing commercial real estate in South Florida can make for a great investment. With a warming real estate market, a thriving economy and increasing housing demand, owning an apartment complex in Fort Lauderdale can be a smart asset and profitable business, whether it be your main income or a side gig.

If you’re new to the world of residential buildings, read on. Consulting with a South Florida commercial real estate attorney before your purchase is a good idea to shed some light on the process of buying an apartment complex in Fort Lauderdale.

Choose the Type of Investment

Do some research to determine your options. Are you looking for a single-use building with apartments or a mixed-use building that has both retail space and apartments? Alternatively, you may be interested in purchasing a building that you can convert to apartments. Either way, ensure you understand the investment – financial and time – involved in the investment. You’ll also want to check with your Fort Lauderdale real estate lawyer about permits and zoning for commercial properties before you decide.

Determine Key Amenities

Think about the building’s facilities and the amenities – fitness center, pool, or party room, for example – that are important to renters today. Who is your target market? What do they expect in an apartment building? What are they willing to pay for? If you can answer these questions with relative accuracy, you’re off to a good start.

Scope Out Neighborhoods

The location of the building matters just as much as the building itself. An inexpensive building in a low-demand neighborhood is likely to be a worse investment than a pricier building in a trendy neighborhood. Buy where people want to live for higher rental income, consistent occupancy, and lower turnover rates.

Talk to Current Owners

Interested in a building? If you’re able to, meet with the current owner and ask a few questions about the building, occupancy rates, and why they are selling. This will paint a picture of what it’s like to manage the building, and whether or not it’s a good investment.

Do the Math

At the end of the day, it comes down to dollars and cents. Estimate your profitability by weighing income potential and costs associated with the property. The rental price of each unit and occupancy rates will give you a sense of gross profit. But what about property taxes and operating costs? No matter what the current owner says, make sure it’s profitable for you.

A South Florida commercial real estate attorney can help you know where to look. From projections on hot neighborhoods to details on commercial regulations, an industry professional offers valuable information when it comes to major investments like an apartment complex. To learn more, call Schecter Law today at (954) 779-7009.