Apartment Building Investing

Apartment building investing generally involves acquiring a property with multiple residential units, ranging from a small building with a handful of units to a larger complex with dozens or hundreds of units, and generating income through monthly rent collected from tenants. Columbus, OH apartment buildings generally range from older properties in established neighborhoods with below market rents and value add renovation potential, to newer construction in areas such as the Short North and downtown core with premium finishes and rents. Investors generally evaluate an apartment building based on its current physical condition, the mechanical systems' remaining useful life, the unit mix, and the gap between current rents and achievable market rents after any planned improvements.

An apartment building held for investment or business use generally qualifies as like kind real property for a one thousand thirty one exchange, and Columbus, OH investors frequently use apartment buildings as replacement property when exchanging out of a different asset class such as land or a single tenant commercial building. Because apartment buildings generally require detailed inspection of individual units, review of the rent roll for lease terms and payment history, and assessment of major mechanical systems such as roofing, HVAC, and plumbing, investors generally allocate significant time within the forty five day identification period for a physical inspection and rent roll review before finalizing the identification letter. A value add apartment strategy, where an investor plans renovations to increase rents over time, generally requires additional underwriting of renovation costs and achievable post-renovation rents compared to a stabilized property acquired primarily for current cash flow.