Investing in Multi-Family Real Estate: Special Problems with Older Properties
A great many men and women are finding investments in real estate to be very profitable. In this regard, there is a significant number of real estate investors who are putting their money into multi-family properties. If this is your ultimate goal, if you want to invest in multi-family real estate, you need to understand the special factors that are involved in purchasing and then owning and maintaining an older property. There are some special problems and considerations attached to older property that you always need to keep mind before you actually make the purchase of such a piece of real estate.
Perhaps the most significant problem associated with owning older multi-family properties is the fact that repair and maintenance costs will tend to be higher. Indeed, in some instances, the costs associated with repair and maintenance can be significantly higher on older multi-family properties. Therefore, when it comes to investing in this type of real estate, you must make sure that you consider this fact in your overall cash flow calculations and allocations.
Another significant problem associated with investing in older multi-family properties is the fact that the utility costs associated with these properties also tend to be higher. The bottom line is that in many cases the heating, plumbing and other mechanical elements of the property simply are not in tip top condition, are not as efficient as they should be. Therefore, the costs associated with the utilities that service the property will be higher. Obviously, this is an important consideration if you will be paying utilities. But, even if the tenants are responsible for the utilities, they will frown on having to pay needless high utility bills and charges.
Finally, in some instances it can be harder to rent units in an older property. In the 21st century, there is a real trend amongst people to want something new when it comes to residential rental property. For this reason, it really becomes important for the owner of this type of investment real estate to make certain that it is in the best possible condition and form to ensure that it is completely attractive to a potential tenant.