Owning an apartment building?

Another quick question for the veterans or anyone with apartment experience…I’m new to this and I want to learn as much as possible before I graduate college and go out on my own.

Lets say I own an apartment building.
Here is a list of expenses that I’ve come up with:

Property manager (filing vacancies, processing rent, paying expenses, etc.)

Is there anything I’m missing here? I’m trying to figure out why it sounds so easy to buy a large apartment building with a good income history, hire a management company, and spend my free time pursuing other business ideas while collecting income from the property.

There has to be some catch that makes this alot more difficult that it seems. Can anyone enlighten me on this, or have I covered everything?

Is it really that simple in design?



A few things come to mind:

  • Reserves
  • Snow removal (if the weather requires)
  • Trash removal
  • Vacancy rate
  • Attorney’s fees (possible)
  • Accountant fees (possible)
  • Advertising (possible)


Thanks, I’ll add those to the expense sheet.

It still seems, even with those expenses (assuming it’s a large building), that there is an almost guaranteed substantial net income.

I’m obviously new at this, but I’ve seen buildings sold that pull in 150-200k NET per year. Even if unexpected expenses come up in the sum of 100k per year, the owner is still pulling in 50-100k NET? Is this possible?

Thanks alot, I have alot to learn :-\

Very possible…especially in a large complex. The numbers can be pretty phenominal…


acct & legal

OK, here’s my next question. How do I learn as much as possible about investing in a building? I want to learn everything about looking for, purchasing, managing, landlording, etc. an apartment building or complex before I even think of doing anything further.

What are some good places to go to learn about this? I’m thinking of joining my local REI club, but what literature or resources are advisable to look at?

Thanks again, looks like I’ve found a new place to hang my hat :smiley:

yes you can make a lot of money owning an apartment complex but you need money to get into it… you usually need between 10 and 20% down. I was looking at a 24-plex for $500,000, but was told that i would have to put between 50-100,000 for a down payment. And that was me figuring all expenses and showing a positive cashflow of $2,000 per month with a 20% vacancy. If you have the money, then you should be fine, but it not then you will probably have to find an investor to go in on it with you which can possibly make it not worth your while depending on your agreement.

What about a handyman and/or the cost of his apartment on premises / his salary?


Apartments are not complicated in any special way. What you are dealing with is a magnitude issue. There can and will be more money made in a 100-unit than a 20-unit. But the proportionately higher returns also coincides with much larger mortgages, expenses, and possible screwups. Put it this way, if everything is an order of magnitude bigger, so is an oversite that causes a negative cashflow. instead of a mistake costing you 100-200 a month(SFH), it could cost you 25,000 a month in negative flow. Do exactly what you are planning and learn everything you can and then if you have the down money and the guts, jump in and make your pile.

I have no affiliation with him at all, but I bought David Lindahl’s course on apartments and there may be more out there dealing with apartments. The money is cheap if you are going to actually get into apartments. Just reading through the material brought out several good points that I had missed in looking at prospective deals. If you are going to try to land the big one right off the bat, then unless you have a money tree somewhere, you better not screw up. ;D