There are a lot of different types of apartment buildings that you might want to think about as investment opportunities. Not all of the apartment buildings in your area, however, will fit your portfolio. Before you dedicate time to exploring new investments, learn about some of the most common types of apartment buildings. A little work now could save you a lot of effort in the future.
Tip! Get the easiest, most effective way to find the names of people and businesses that own the types of apartment buildings you want in your portfolio.
Common Types of Apartment Buildings
The following list includes some of the most common types of apartment buildings found in North American cities and towns. It’s always possible that you will find some properties that don’t fit into one of these categories perfectly.
Low-Rise Apartment Buildings
Low-rise apartment buildings typically have four or fewer stories. They’re fairly small, but they can represent excellent opportunities for buyers and investors.
Benefits of Investing in Low-Rise Apartment Buildings
- Of all types of apartment buildings, these tend to require the lowest financial investments because of their smaller sizes.
- Low-rise apartment buildings can provide excellent ROI opportunities, especially for investors just entering the multifamily real estate industry.
- It’s relatively easy to manage low-rise buildings because they have fewer units than larger buildings.
Mid-Rise Apartment Buildings
Mid-rise apartment buildings exist in a category between low-rise and high-rise buildings. Most cities define mid-rise apartments as having between five and 11 floors.
Benefits of Investing in Mid-Rise Apartment Buildings
- These types of apartment buildings give you a step between low-rise and high-rise properties, so you can slowly transition toward larger pieces of real estate.
- Mid-rise apartment buildings usually have more units or larger floor plans than low-rise buildings, so you can potentially earn more money from renters.
- Mid-rise apartments are popular in a broad range of suburban and urban areas, so—depending on your city—you might be able to invest in communities throughout the area.
Tip! Choose a property database with accurate contact information so you always have the right phone numbers of property owners.
High-Rise Apartment Buildings
High-rise apartment buildings usually have 12 or more floors. Your city probably sets the maximum number of stories residential buildings can have. In a large city such as New York, you can find high-rise apartment buildings with several dozen floors. In a smaller city, such as Cincinnati, high-rise buildings don’t stand nearly as tall.
Benefits of Investing in High-Rise Apartment Buildings
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The high number of floors means you have a lot of units that you can rent.
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You might find that you can charge a premium for penthouse units.
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Although high-rise buildings usually require large investments, they usually retain their values (or increase in value).
Mixed-Use Buildings
Mixed-use buildings combine residential and commercial units into one property. Often, the building’s first floor has spaces for retail stores, restaurants, cafes, and similar businesses. Stories above the first house apartment units. In some cases, businesses might also rent units or entire floors in a mixed-use building.
Benefits of Investing in Mixed-Use Buildings
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Since mixed-use apartment buildings have commercial and residential spaces, you can expand your target market and diversify your revenue streams.
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Mixed-use buildings are popular options in urban areas where businesses want to give customers easy access to their stores but residential renters prefer living above the first floor.
Finding the Types of Apartment Buildings That Fit Your Portfolio
Only you can decide which types of apartment buildings fit your portfolio. Plan to talk to your financial advisor before you make any major investments. They should have information that helps you understand your budget and target ROI.
Once you know what types of apartment buildings you want to invest in, you will need to find opportunities in your area. You have plenty of research options, such as cold calling, mailing, and emailing property owners.
Unfortunately, these outreach campaigns can take a lot of time, energy, and money. ProspectNow gives you a more convenient way to narrow your lead list and manage your campaigns.
With ProspectNow’s database, you can filter properties by important features, including size and cost. If you want to focus on mixed-use buildings, you can generate a lead list of that specific type of property. The platform will give you a list with the accurate contact information for owners.
Tip! Don’t waste time asking government agencies to give you information about an apartment building’s owner. A subscription database makes the process much faster and easier.
How to Invest in Apartment Buildings
Investing in different types of apartment buildings can include diverse strategies. The approach that works for one person doesn’t always create the same level of success for others.
Some of the general strategies you can use include:
- Buying buildings with cash and earning money by renting units to tenants.
- Buying buildings with cash, refurbishing the units, and selling them to a different owner.
- Getting several investors to contribute money that you put toward purchasing one or more apartment buildings.
- Borrowing money from a bank or other lender to purchase investment properties.
If you already work as a real estate broker, you can use this ROI calculator to estimate how much your revenues will increase when you start using ProspectNow.
Keep in mind that ProspectNow often does more than increase your revenues. It can also lower the amount of effort that you put into projects.
The platform uses machine learning and artificial intelligence to identify off-market properties that will likely go on the market within the next 12 months. Getting a head start makes it much easier for you to build a relationship with the current owner and express your interest in acquiring the property or overseeing the sale.
Increase Your ROI With Help From ProspectNow
Find the types of apartment buildings that interest you with help from ProspectNow. In addition to showing you off-market properties, the platform makes it easier to manage your leads and finish each step of every real estate project.
Experience the benefits of using ProspectNow by requesting a demo of the commercial real estate database.