I once thought that the only way to buy apartments was to save enough to buy a small multifamily such as a 3-family house, rent them out until they made enough money to buy another one, and keep repeating. To buy anything much larger would require a lot of money. This is particularly true where I live in Massachusetts. Housing is so expensive that it is very difficult to find apartments that actually make money when you first buy them. It takes time for the rents to move up to where there is anything left over after paying the mortgage and bills.
Also, as a landlord I would need to make sure the property was maintained, the tenants were happy (and paying), as well as answer the emergency calls at any time of day or night. This may not be a big deal when you only have a few units, but as the numbers grow it can become a constant interruption to your life, not to mention stress.
I recall in one of the units that I leased as a short-term rental; I was always concerned…. What’s going to be broken this week? Is it really going to be vacant or will it get rented at the last minute? What happens when the damage deposit doesn’t cover the ruined carpet? Is it even worth renting? It’s not even the money that gets to you, it’s the time and annoyance of the whole thing.
So, what’s the solution? It is "group investing". This is where a team of investors pools their money together with a professional manager in what is called an “Apartment Syndication”. I love it because it creates a monthly cash flow that allows us to supplement our income or retire sooner. By getting together in groups we can buy much better apartments than any one of us could do on our own. The best part about it is that you don’t have the headaches of tenant phone calls, leasing, and maintenance. And, you get all the financial benefits of owning real property such as cash flow, tax deductions, leveraged returns, appreciation all in one of the best inflation hedge investments there is.
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