Monthly residual income is one of the most attractive aspects of being a real estate investor. The checks come in every month, and you’re not trading your time to earn the income. This means freedom and many a successful real estate investor enjoys the freedoms in life that are afforded by substantial monthly income that comes from rents on their properties.
I discovered a long time ago that there is a better way to enjoy the monthly income that is out there in real estate. That better way is in apartments. By comparison, if you lose a tenant in a three family house, you’ve only lost one third of your income. Rents from the other two units will cover your mortgage until you get another tenant. That’s just one of many reasons that owning apartments is smarter than owning single family houses.
What about the total income potential? Which is easier, generating $10,000 a month from 100 single family homes or $10,000 a month from one 100-unit apartment complex? I don’t think one has to be a math whiz to answer that question. In short, your monthly income goals for your real estate business will be much easier to achieve with apartments than they ever could be with single family homes.
There are other issues to consider as well. Risk with apartments is far less as the impact of a few vacancies is far less than it is with single family homes. Tenant turnaround is shorter, apartment cleanup is easier, and, when you are choosing your investments wisely, you may already have people waiting to move in when someone else moves out.
Maintenance issues are also easier when you work in volume. Yes, a 100-unit apartment building has 100 separate units. But the units are contained with a handful of buildings, rather than them all being separate and having their own independent maintenance issues. This advantage is a no-brainer in favor of apartments.
Increasing your income is far easier with apartments as well. A simple raise of rents by $25 in a 100-unit apartment complex effectively increases your monthly income by $2,500. Can you imagine getting 100 separate tenants in single family homes to all agree to pay that much more in rent without having a rash of vacancies and lost income? I don’t think so.
The bottom line is this, folks. Business owners for centuries have realized that volume is a great way to produce massive amounts of revenue and create a virtual empire. Real estate is no different.
Can you see how your own empire could be created, simply by shifting your real estate focus from small units to larger ones? Can you see how it can be created in a short time? Holding single family houses will make you money. Holding apartment houses will make filthy stinking rich! Which do you prefer?
