A couple of days ago I told you the three questions you need
to be asking yourself when you purchase an apartment
property…BEFORE you purchase.
By way of review…
Are The Numbers Real and Can They Be Verified?
5 Years From Now Will This Location Be Attractive To Renters
and Possible Buyers Of This Apartment Property?
Do I Want To Be A Landlord Or An Investor? (Probably First Question).
Lets talk again in this blog about the numbers and why they are so
important.
Remember the value of the property and the cash flow is all regulated by
the numbers. It could be the most beautiful (or ugly) property in the
city but if the numbers do not work then the property does not work
and makes no sense to own. You could have a good location and
a good tenant mix but if the numbers are out of whack you pass on
it – no matter how nice it is.
But…
What about realistic potential? What about that?
Lets say you just got done looking at an apartment property and
the numbers do not add up. BEFORE you trash it and move on
you need to ask ONE MORE question….
Can I realistically raise rents and reduce expenses in the next 12
months? If so, what does the property look like now??
The KEY WORD HERE is REALISTICALLY! Now is not the time
to fantasize. You have to be realistic.
After this exercise it may still be a project to trash. Fine. But…
You will find that more than one project will be very, very good
and on the surface may be a dog but may be great after you
get done working on it.
So, keep this in mind as you move and look at each property.
Boyd McClean
www.noteswilltravel.com