Learning Center
Apartment Investing Education
Our goal is to support and educate our investor community on Apartment Community Investments and provide the knowledge needed to make an educated investment. Check back often for added education insights and materials.
Apartment Investing Advantages
Below you’ll find seven Apartment Investing Advantages and why they are helpful in your search to find alternative investments.
1. Social Responsibility
Investing in Apartment Communities comes with a great deal of Social Responsibility. We’re investing in someone else’s home. The residents of the property are our customers, and they should be treated accordingly. 95% of the investors we encounter do not care about this. At APTVEST, we do. The residents are not just a number. They are valuable human beings and should be treated as such. Through investing in apartment communities, we can provide clean, safe, quality, affordable housing that make residents and investors proud.
2. Income
Passive Income is the buzzword today. Regardless of your opinion on passive income, investing in apartment communities can provide a yearly cash yield or divided. Depending on the investment type (Core – Yield, Value Add, Opportunistic) this cash yield can be a double-digit figure. This allows investors to invest in an apartment community and receive income as a return on their investment.
3. Captial Preservation
Investors have worked hard for their capital. Most want to know that they can keep it and grow it. Through investing in apartment communities, investors have an opportunity to place capital in an asset and come back to it after a certain period of time and receive back the original invested amount, or principal investment.
4. Tax
The IRS has made it advantageous to invest in apartment communities. Investors can reduce tax liability investing in apartment communities through depreciation, capital gains and the IRS Code 1031 Exchange Rule. These three tools used together can provide tremendous value to apartment community investors.
5. Appreciation
When you buy or invest in an apartment community you are investing in a business first and a property second. Through improving the business operations and then the physical condition of the property the value of the asset will increase over time. This allows investors to grow their principal investment and receive a multiple on invested capital.
6. Leverage
Investors can take advantage of the financial tool of leverage by investing in apartment communities. By utilizing this tool, investors can finance a large portion of an apartment community acquisition. This allows investors to purchase a larger property than if they were to pay cash. By pooling capital together, investors can create even more leverage through Joint Venture Partnerships or Syndication to become apart of a larger investment than they otherwise would be able to by themselves.
7. Inflation
Inflation is when the cost of goods rises which in turn makes the buying power of currency weaker. Investing in apartment communities protects against a weak dollar through having capital invested in a physical asset / business rather than traditional paper investments. As currency weakens, rents will increase increasing the income of the asset and increasing the overall value.
Apartment Investing Fundamentals
These are the most effective Investment Vehicles we provide through APTVEST. If you’d like more information, please feel free to reach out to us to discuss.
Core - Yield
Stabilized Cash Flowing Assets with Modest Growth Through Progressive Management
- Risk Profile: Low
- Property Type: A & B Assets, A & B Locations
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Average Return:
Cash Yield: 6%-10% Annually; 10%+ in Some Cases
Equity Multiple: 1x-1.5x
IRR: 8%-12%+ - Hold Period: 5 - 10 Years
Value Add
Stabilized Cash Flowing Assets with Healthy Growth Through Improving Operational Inefficiencies & Physical Updates
- Risk Profile: Medium to High
- Property Type: A, B & C Assets, A, B & C Locations
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Average Return:
Cash Yield: 6%-10%+ Annually; 10%+ After Stabilization
Equity Multiple: 1.5x-2.0x+
IRR: 12%-18%+ - Hold Period: 3, 5 or 7 Years
Opportunistic
Distressed, Underperforming Non-Cash Flowing Assets or New Ground Up Developments
- Risk Profile: High
- Property Type: A, B, C & D Assets, A, B, C & D Locations
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Average Return:
Cash Yield: 10%+ Yr One or Later
Equity Multiple: 2.0x-3.0x
IRR: 20%+ - Hold Period: 3, 5, 7 or 10 Years
Investment Vehicles & Partners
These are the most effective Investment Vehicles we provide through APTVEST. If you’d like more information, please feel free to reach out to us to discuss.
REIT // Non-Accredited
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Debt
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Individual Deals
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GP Fund
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