Suppose you own a house and a ten-unit apartment building. If you have a vacancy in the house and a vacancy in the apartment building, what do you have? 100% vacancy in the home and 10% vacancy in the apartment. The vacancy means there is no income. Also, you would still have to pay for utilities. With the apartment, you would have the other 9 units making money.

Lenders prefer to lend large amounts of money rather than smaller amounts. Naturally, they want to lend more, because that means they would get a higher commission. When buying single-family homes, the borrower must qualify for the loan. They look first at the borrower and then at the property. With apartments it is the opposite. Logically, if you own a 25-unit apartment building and your debt / mortgage service is $ 15,000 a month, very few people could afford that payment on your own. Lenders want to know how much income the property generates. Ownership is business so to speak.

Let’s say you want to buy 20 houses. You would have to get 20 different appraisals, loan documents, title fees, etc. Now after owning these houses you have to maintain them … sinks, toilets, paint, carpet, etc. This will be a huge task even if the houses were in the same city. Compare that to a 20-unit apartment. Things are simplified. 20 people go to work every day to pay their mortgage. Comfort is the key, the same carpet, sink, steam line billing, etc. With regard to tax benefits, you can establish an LLC for the apartment building vs. 20 LLC for homes. For filing taxes, there is a section called “Schedule E”. With the 20 houses, you will need to fill out 20 different forms. You will need to track each property separately, such as labor, supplies, maintenance, utilities, and materials. You see this can get complicated. Another benefit of investing in apartments is that you can hire a property manager to take care of the property (of course you can do this with all 20 houses, but it will cost you more as a homeowner). When you hire a property management company, they do all the work. Your job is to manage the property management company. Every month they will send you a check (that is, if there is cash flow). Imagine, you wanted to sell your 20 houses, how fast do you think you could sell them? Imagine all the work that will involve (appraisals, projections, other documents). Now look at the sale of your 20-unit apartment building. A transaction.

Other reasons

1. Ability to generate income (cash is KING)

2. Recognition (ask tenants to help you pay your mortgage)

3. Tax shelter (put in LLC, cancel capital improvements, mortgage interest and depreciation)

4. Easy to create new value by making improvements to the property.

5. Inflation fighter (cost of living remains equal to cost).

Investing in apartments is an easy way to achieve financial freedom. Through leverage, you only invest a fraction of its value and earn years of income from that property, even if you sell it for half of what you paid for it!