Investing in apartments and renting them is a good way to generate consistent cash flow every month.
Investing in apartments is one of the most popular ways of generating passive income. I preach about it all the time, and I even designed an entire training on how to get started in real estate investing.
It’s one of those things you can do now and set yourself up for success. Why apartments? There’s more opportunity for profit than buying a house. You can collect rent from multiple tenants over a single-family home. Overall, it’s a better long-term investment.
Here are three different strategies you can start using today to invest in apartments:
1Invest in Apartments By Yourself
I don’t recommend doing it yourself because it’s easier to make mistakes. The hardest part about investing in apartments isn’t the tenants, the termites, or the toilets – it’s in finding the right deal. This is the most challenging part because you need to know what a good deal is and isn’t. Knowing there is competition on the deal you buy means paying more for the value. But, if you didn’t know that, you might get a worse deal.
2REIT (Real Estate Investment Trust)
This is like buying stock or paper ad not investing directly into real estate. This is great for those who want the cash flow yield, but don’t kid yourself; It is not a real estate investment. And the IRS does not allow owners in a REIT any of the significant tax advantages offered to real estate owners. While many REITs invest in apartment communities, most of these buy portfolios of properties and then sell shares to investors.
3Partnership
This is where you either create a partnership or become an investing partner with other professional real estate investors who are investing in apartments. If you decide to start your partnership and do all the work – you can raise funds from friends and family, and it’s practically a full-time job.
Option One: If you decide to create your own partnership and do all the work – you can raise funds from friends and family. It’s practically a full-time job.
Option two: Become a syndicator. Invest money with a professional real estate investor who raises the money from others to buy and manage deals. This person makes most of their money from fees, while the syndicator will benefit from selling at a profit.
Option Three: Partner on a profit-sharing/cash flow formula. Investors partner on real estate deals experiencing all the benefits of real estate and ride as passive investors, sharing all the upsides of investing – with none of the headaches.