How Much Does it Cost to Buy an Apartment Building?
Many entrepreneurs choose to invest in commercial real estate as a way to accumulate wealth over time. One option is to purchase an apartment building. Owning one of these multifamily structures offers numerous benefits, including providing a steady stream of passive income, tax advantages, and relatively low risk.
How much does it cost to buy an apartment building? The answer depends on several factors.
Apartment Building Classes
Apartment buildings fall into various classes that impact the structure’s cost:
- Class A: Located in safe, desirable neighborhoods, these buildings are newer, luxury structures that appeal to wealthier individuals and families. The higher value makes them more expensive to purchase.
- Class B: Class B buildings also attract high-income renters. However, they are typically a bit older and not in the same excellent condition as Class A structures. Investors can consider purchasing one of these apartment units and upgrading it to reach a higher classification.
- Class C: Structures in this apartment building class are at least 20 years old, offer only basic amenities, and are found in less desirable neighborhoods. They appeal to renters with modest incomes who do not expect many services. Their lower price can make them more affordable for buyers with moderate financial resources.
- Class D: This lowest apartment building classification is also the least expensive. These structures are at least 30 years old and have visible signs of wear and damage. They are often located in deteriorating, high-crime neighborhoods. Many are government-subsidized buildings that attract low-income renters.
The Importance of Location
The physical location directly affects the cost to buy an apartment building. For example, you can expect the price to be higher in the Greater Boston Area than in Mississippi for a similar structure. As a property owner, a higher purchase price will likely require you to charge more rent to recoup your investment and earn a profit. Bear in mind that even a nicer building may be more difficult to rent if it’s located in a neighborhood perceived as unsafe.
Are Apartment Buildings Good Investments?
In short, purchasing an apartment building can be an excellent long-term investment, especially in areas where many renters are looking for a place to live. You’ll need to commit to performing regular maintenance, filling vacancies promptly, and responding to tenant issues and complaints to make it a profitable business venture.
How a Real Estate Attorney Can Help
Are you looking to purchase an apartment building? If you are in Massachusetts, having an attorney represent you in the transaction is a legal requirement. Hiring a professional real estate attorney also offers several important benefits:
- Contract assistance: Real estate contracts can be complicated. Your attorney will review the document to ensure it protects your rights.
- Dispute resolution: Disagreements between buyers and sellers may arise during a real estate transaction. Your attorney will represent you during a dispute and safeguard your interests.
- Legal advice: Your attorney will guide you throughout the process to ensure you’re equipped to make informed decisions.
Contact Calabrese Law Associates for Help
Calabrese Law Associates is an experienced real estate law firm that will provide reliable legal guidance if you purchase an apartment building in the Greater Boston Area. Contact us to learn more.
This publication and its contents are not to be construed as legal advice nor a recommendation to you as to how to proceed. Please consult with a local licensed attorney directly before taking any action that could have legal consequences. This publication and its content do not create an attorney-client relationship and are being provided for general informational purposes only.