Should you invest in a multi-unit apartment building?
Choosing between an apartment building and a single-family home is one of the most talked-about and key investment decisions made in the real estate and property investment sector. There are a variety of factors that influence a buyer’s choice, and that there’s no one correct answer when it comes to the property type one ultimately put their money on. But knowing the plus and minuses of opting for one over the other, depending on your financial circumstance, will greatly inform you of the more optimal choice, says Travis Cadman of leading residential property company Investar USA. Firstly, there are differences in valuation. When putting a price on a one- to four-unit residential building, it’s best to apply the Comparable Sales Approach. This means evaluating property value based on a comparison of the price of sale received by those in your neighborhood. When looking at a five-plus-unit residential building, however, the value is dictated by the Income Approach, which is when ...