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Apartment Investments Generate Additional Income

tmo — Tue, 16 Aug 2011 16:19:23 +0000

If you are ambitious and want to make some additional income investment property is a great avenue to do this in both the long term and short term. In the long term you can cash in on the property around retirement time and make some substantial capital gains. In the short term you can earn some additional monthly income while incurring a part time real estate management position. In reality is it’s the perfect investment as it provides for both short term and long term financial gains.
Whether you buy 1 or 10 apartment buildings the principal is the same, although the landlord part may become full-time and the monthly income may become a full salary. Being a landlord isn’t for everyone as it entails many undesirable tasks such as consistent maintenance and repair due to the tenants and their carefree mind sets, but the frequency of these tasks will vary with the quality of investment property and the location, which dictates the quality of tenants that you will obtain.
It is beneficial to do your homework before entering into apartment investments as the proper education and information prior to a purchase can lead to a blissful investment that will offer many years of financial rewards. The variables of your financial resources and ability to manage a business will have a big impact on the stability and success of your apartment investments. If you can act as a property manager and a handyman then you can do this, although you will need some special land lord skills that aren’t taught in school, you will acquire and develop them through proper experience. The biggest obstacle for new landlords to overcome is the tenant landlord relationship, which detrimental to their success as a landlord and the amount of stress that they will incur.
There is some great landlord material on the internet that can easy the landlord learning curve and help them enter into the lucrative stage from the start. Blogs are a great source of information as they are written by real people who are actually hands on, Two great sources information are, http://cil-my-landlord.blogspot.com/ which talks about everything including landlord mistakes to avoid and http://landlordadvice.wordpress.com/ which has some thorough information on how to collect rents and successfully interview tenants. There plenty of viable resources on the net for landlords, just check the ones by the real landlords and you will do just fine with your apartment investments

Apartment Investments Generate Additional Income is from Apartment Buildings For Sale

HFO Investment Real Estate Brokers Announces $17 million Sale of 220-Unit Apartment Complex in Clackamas, OR

tmo — Mon, 23 Aug 2010 06:37:41 +0000

HFO Investment Real Estate Brokers Announces $17 million Sale of 220-Unit Apartment Complex in Clackamas, OR
PORTLAND, Oregon–(BUSINESS WIRE)–HFO commercial real estate brokers announce $17 million sale of an apartment complex in SE Portland. The transaction marks the largest apartment building sale in Oregon so far in Q3 2010.

Council backs rezoning for 40-unit apartment building, despite some neighbourhood opposition

tmo — Tue, 27 Jul 2010 12:46:04 +0000

Council backs rezoning for 40-unit apartment building, despite some neighbourhood opposition
A proposed three-storey 40-unit apartment building on Barnardo Ave. is being opposed by residents in the neighbourhood who are concerned about building over green space that they’ve enjoyed near their homes.[...]

Should my wife and I sell our apartment in the center of Beijing, China?

tmo — Tue, 27 Jul 2010 11:35:29 +0000

My wife and I own an apartment in the center of Beijing, China. It is in the HaiDian District. It has 2 master bedrooms both having balconies facing the famous CCTV tower. The apartment has one bathroom with shower, a kitchen, and big living room. It is on the 8th floor of a 23 story building. The building has gated parking with security guards and station.

What do you think? Time to sell or time to wait?

THANK YOU!

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Should my wife and I sell our apartment in the center of Beijing, China? is from Apartment Buildings For Sale

apartment lease question?

tmo — Tue, 27 Jul 2010 09:55:10 +0000

The apartment building i live was sold. The company that owens it now is doing some kind of ” tax creidt” thing with the property which i think means they get government aid or something like that. anyway they are telling me my income is to high to live there and that i have to move. and that they dont have to honor the other companys lease anymore.? which was just renewed about 30days ago

any info would be helpful

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apartment lease question? is from Apartment Buildings For Sale

Super-luxury New York Apartment Sales Set New Record

tmo — Tue, 27 Jul 2010 04:58:43 +0000

With the peak of the Manhattan Real Estate market looking like it has passed for the near term, many observers are waiting to see when the drop in the market’s value will begin and how far down it will go.

Those assuming the same will happen with the luxury market, however, are beginning to wonder if the old axiom about assumptions might start to apply to them. The number of super-luxury apartments – those with a cost greater than $4 million – sold in the month of May hit a new all-time monthly record of 52 units.

Indeed, though the luxury market has led the way, the Manhattan market in general is faring relatively well. Even excluding some of the priciest closings on the island that took place at 15 Central Park West, the average price for an apartment has risen to $1.54 million.

There was a widespread agreement among high-end brokers that demand for trophy apartments had hit a new high. The economics of it is simple: Those that are looking to purchase a home for more than $4 million have far more in the way of liquid assets than the value of their homes. So much so, in fact, that their purchasing decisions are as immune to the business cycle as any segment of the larger economy.

Indeed, especially with the low dollar stimulating foreign demand, the luxury New York apartment market may more sheltered from the larger macroeconomic situation as any major market in the country.

That being said, some of the more prominent condos in the city have recently cut their prices. The lay offs at Bear Stearns and other financial firms may have been a factor. At the Time Warner building overlooking central park, sixteen units have seen their prices reduced recently, three of them in the last week, and two of those by more than a million dollars.

It’s easy to read too much into recent moves at properties like Time Warner, however. Since the overall economic situation effects the luxury New York apartment market far less than most real estate markets, the importance of quality is considerably more important. Some buildings simply do not live up to their hype, and after the initial luster wears off, landlords find few people who will actually spend millions on an apartment where small details are not as perfect as they should be for that price.

Nicholas Adams Judge is a freelance writer specializing in business, politics and economics. He holds a B.A. in political science and will begin his PhD studies in political economy and public opinion next fall. He has studied economics and political science at a number of different institutions, both here and in the U.K., including Amherst College, Warwick University, Oxford University and the University of Massachusetts-Amherst.

Super-luxury New York Apartment Sales Set New Record is from Apartment Buildings For Sale

Can I write off painting apartment on taxes?

tmo — Tue, 27 Jul 2010 01:45:58 +0000

I have lived in the same apartment for over 5 years and been thinking now of painting all 6 rooms. The building just got sold, and although I’ll be staying I’m afraid my new landlord may refuse to paint or to reimburse me for painting the place. Could I potentially do it myself ( with the landlord’s authorization) and be write it off my taxes?

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Can I write off painting apartment on taxes? is from Apartment Buildings For Sale

Does a rent stabilized apartment in NYC losses it’s status if sold?

tmo — Mon, 26 Jul 2010 23:27:35 +0000

I live in a rent stabilized apartment in NYC for many years, and the building has now been converted into condominium and the landlord wants me to buy off my apartment, so my question is if i will lease out the apartment to someone, is it still Rent Stabilized

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Does a rent stabilized apartment in NYC losses it’s status if sold? is from Apartment Buildings For Sale

Cost Segregation provides apartment owners tax relief

tmo — Mon, 26 Jul 2010 22:05:34 +0000

Apartment owners can face staggering expenses to maintain apartment communities. The upkeep of even a modest community could involve groundskeeping, unit renovation, and replacements, such as parking lot asphalt and fencing. Another steep expense is federal income tax – and in some areas an additional state tax on income – but through an innovative study known as cost segregation, the depreciation of property components can be used to help lower federal taxes.

Today, more apartment investors, especially those whose occupancy rates are challenged by the nation’s single-family housing, are taking a close look at every possible avenue to lower costs. That’s a frustrating task in the apartment business. One historically underused technique for saving money, in this case saving taxes, is to ensure that all depreciable items are reflected accurately on tax returns.

Those items are not limited to copiers, automobiles and heavy equipment. The list extends to a wide range of buildings and improvements. In fact, the IRS recognizes 130 items that depreciate over much shorter time periods than the standard depreciation of 27.5 years for an apartment community. Many of those items, such as parking surfaces, landscaping and even certain wall coverings, are present in large proportions on typical apartment communities.

A cost segregation analysis, when reflected on deprecation schedules, reduces taxable income now and also defers taxes on capital gain amounts until the community is sold. At that time, the recapture of taxes on the extra depreciation taken can occur at a much lower rate than the 35 percent max tax rate that was avoided with the extra losses.

Don’t forget the time value of money by deferring that inevitable tax by a few years. In light of the 130 IRS-identified “short life” items, this conservative tax-planning tool can help apartment owners allocate more costs to five-year, seven-year, 15-year and 27.5-year improvements versus the land value on apartment communities.

Apartment communities, according to IRS rules, depreciate over the course of 27.5 years. This is 10 years less than the depreciation estimated for office, retail and industrial properties, which equal quicker savings for apartment community owners. Items that are found in every apartment, such as carpet, linoleum, window treatments and appliances, are categorized as five-year items, meaning that they are typically replaced after five years of use.

Wide Range of Applications

Whether the community was recently purchased, has been owned for a while or is on the market to be sold, a cost segregation analysis can help at any stage of ownership by reducing federal income taxes and showing future depreciation. The optimum time to do this is preferably as soon as ownership is taken, whether the property was bought or built. Any commercial property built after Dec. 31, 1986, is eligible, and there are “catch-up provisions” to accommodate higher savings in the first year when a cost segregation study is completed for communities that have been owned for several years.

Communities of all sizes can benefit, from small communities of fewer than 10 apartments to communities that span several city blocks. If the property has an assessed value of at least $200,000, the cost segregation evaluation can almost always produce substantial federal income tax savings.

Preparing for a Study

A minimal amount of an owner’s time is required when working with a consulting firm that specializes in cost segregation. And it is advisable for the owner’s CPA or tax accountant to work with the consultant, ensuring the most advantageous application for that owner’s particular financial circumstances.

The original purchase price of the apartment community is the cost basis, so owners receive savings on their initial investment, as well as on improvements. With research that is both quantitative (square footage of asphalt, pavement, ect., or quantities of wall or window coverings, ect.) and qualitative (judgment of remaining life) a specialized analysis and calculation is conducted before a report is issued. This report becomes the backup documentation for federal income tax returns.

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About the Author

Patrick O’Connor, MAI, is president of O’Connor & Associates. The firm, in business since 1974, specializes in state and federal tax reduction services, real estate appraisals and research and consulting nationwide. With offices in Houston, Dallas, Los Angeles and Newport Beach, the firm employs more than 130 people. Patrick O’Connor is frequently acknowledged by national publications as a respected source of information on real estate trends.

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Cost Segregation provides apartment owners tax relief is from Apartment Buildings For Sale

What does it take to buy an apartment building?

tmo — Mon, 26 Jul 2010 15:45:24 +0000

I’m thinking if you could buy an apartment building for 1.4 million that brings in 227,000 per year in rent, could you finance it with a loan? Say your loan is 175000 per year. That would leave you with 52,000 per year to maintain the property, and anything left over is profit. Are my numbers unrealistic? If not, what prevents more people from doing this? It seems like such a simple and obvious way to make money with relatively little effort involved. Usually there is a catch, but I’m thinking most mortgages on a 1.4 million dollar property might be even less than 175K a year. Maybe more like 120K over 14 years. So 226,800 in rent would leave you with 106,800 a year for maintenance/profit.

These are real numbers from a real property I’m looking at online right now. 1.4 million dollar selling price, 227,000 per year in rent. Is there something I’m missing here?

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What does it take to buy an apartment building? is from Apartment Buildings For Sale