apartment
For many renting is a way of life, and more people are choosing to rent rather than buy, even if they can afford to purchase a home. The myth that renting is “throwing away money” as compared to the high costs of home ownership has been busted.
Deciding to invest in an apartment building is only the start. There are quite a few different angles to consider. The way you choose to pursue depends on how involved you want to be, how much capital you have, how much time you want to commit, etc.
Whatever the case, owning the property means that you get to make all the decisions and can base it off of what’s going on with your life at the moment, not just the overall strategy.
Having a partnership can be a tricky dance, but that’s why you need to go in with your eyes open. You also need to document and discuss everything you can beforehand. If you find the right partner, though, it can be a very rewarding (and lucrative) experience.
A “syndication” is a pooling of funds in order to purchase a property (in this case, an apartment building). The syndicators are what’s known as “general partners,” and investors are known as “limited partners.” General partners make all the decisions and actively run the property according to the business plan they’ve laid out.
A real estate fund is capital that is raised with the intention of buying multiple apartment buildings. It is typically “blind,” meaning that investors bank on the reputation of the fund managers, their business plan, and their track record rather than the property itself.
A REIT is a large corporation that runs and manages multifamily properties. When you invest in a REIT, you’re buying shares in the corporation–not in the properties themselves.