So, you’re thinking about Investing in Apartments, and you’re looking for some more information, right?
One big question in your mind might be,
Maintaining purchasing power by overcoming the eroding effects of inflation remains one of the basic challenges of long-term investing. Take a look at what would happen to the purchasing power of $1 million "stuffed under the mattress" at varying rates of inflation. For example, if inflation averages 5% over the next 40 years, $1 million would be worth just over $142,000, losing over 85% of its value!
Equity investments such as real estate have historically outpaced inflation. By doing so, they help investors maintain purchasing power during retirement years. In addition, studies have shown that diversifying your investment portfolio with real estate offers the potential for reduced risk and higher returns.
The Echo-Boomers (the children of the Baby Boomers consisting of young adults born between 1982 and 1995) are the largest generation of young people since the 1960's. There are over 80 million echo boomers and 4 million per year turning 18 years old. It makes up 30% of the population in America.
Apartments almost always provide a more affordable housing option. That means when the market is down, people rent. And when the market is up, rents increase rapidly.
Property values and replacement costs have historically outpaced inflation.
There are millions of single family home real estate investors competing amongst themselves. More buyers create a competitive environment and that makes it more difficult to make quality investments. That's why Ashley Investment Group specializes in primarily apartment buildings. There are less buyers competing for the properties available, especially properties between $2-$10 million.
Apartment sellers are not emotionally attached to the property - they operate the property as an investment. They understand operating costs. They understand capital expenditures. The bottom line? The numbers just make more sense.
Ashley Investment Group hires the best management companies to handle the day-to-day operations of the asset. Instead of managing 100 houses spread all over town, apartment buildings offer investors the ability to create more income, minimize vacancy and expense, and control capital expenditures by spreading the cost among multiple units.
There's nothing wrong with spending money on an asset that will produce desirable returns. Ashley Investment Group and its management team has done this in the past and will do it again in the future. However, it's not always necessary. Oftentimes it's easy to increase the income on a property and spend very little (even nothing) doing it. For example, a $10 per month rental increase on a 200 unit apartment building equates to $2,000 a month of extra income!
Property values can increase very quickly when you invest in the right kind of asset in the right place at the right time. Ashley Investment Group understands the national real estate market and has the experience necessary to invest in the best properties and "force appreciation".
The flow of information in the real estate market, especially when considered from a city-by-city, parcel-by-parcel perspective, is highly inefficient compared to the markets for equities, bonds, and commodities. This inefficiency has been magnified during the last year, as many experienced real estate operators have begun to work through their own issues regarding their own distressed properties. As the quantity of distressed property has been surging, many of the experienced buyers have been immobilized and are out of the market. Ashley Investment Group anticipates these conditions will continue well into 2014 and possibly 2015. That means more properties will be available to few buyers who have the ability to make an investment.
Real estate investments may offer tax benefits. The majority of gains are expected to be generated from capital appreciation and generally taxed at long term capital gains rates. Please consult your tax advisor for further information on this issue.