I know most of us here are landlords for SFHs. Just out of curiosity, anyone has invested in apartments and can share some experience here?

There is a tremendous mix of owners here.

Current owner of over 100 rental units in the Los Angeles area. Until Los Angeles, West Hollywood and Santa Monica put "rent control" into play -- owning units was a blast compared to a vacant SFR.

If you buy right, anything positive you to an apartment will bring in higher rents. With a 15 times gross multiplier for each extra $1 in rent you bring in per month -- means the property is worth $180 more in resale value.

With rent stabilization, rent control, annual Heath Department Inspections, every 3- 4 years the Housing Department do their inspections also.

I own a 3-, 4- and 8-unit buildings. I love multi-units!

Pluses: I am responsible for lawn cutting and snow shoveling but this is easily hired out. Do not have to worry about a vacant building as there has never been a time when more than one or two units is open. Only three roofs to worry about, three tax bills, three locations to go to. Outdoor area and common indoor area are easily accessible so do not have to make prior arrangements with tenants to check these areas. When doing pre-arranged interior inspections (smoke and CO detectors, water issues, general maintenance), can visit each building and bang it out in a few hours.

All of my units are either one or two bedroom (very important in a multi-unit), which keeps the number of residents in each to a manageable number. The buildings are nice and easily rented so I can get away with no pet and no smoking rules.

I have several duplexes and a 4-plex, but no apartments. Been trying to move that direction via a syndication/money-partner deal.

With respect to those who say, "I don't worry about vacancies because units 2-10 carry unit 1"... Well....that's sort of like saying I have 10 houses and when one goes vacant I don't worry because the cash flow from the other 9 "carry" the 10th one. Really, what is the difference? Vacancy is vacancy, whether in a SFH or a multiunit. It stinks. Work to limit and eliminate vacancy as much as possible. Every day vacant is money lost regardless of what kind of unit it is.

S i d's rant on multi-family complete. ;-)

As NE says, it's all about numbers. There is typically more drama and turnover in multi-units vs. SFH...depending on a number of factors. I really don't think there's a way to compare apples to apples except through a ruthless look at ROI. What are you earning on what you have invested and is it sufficient to meet your goals? You MUST consider all expenses: management, lawn care, maintenance, CapEx, utilities, etc. Don't fool yourself into thinking that because it's a multi-fam, you don't have to count the 50% off a month's rent for the on-site, part-time manager. It is a COST. Maybe not a check you write each month, but lost or discounted rent means less $$$ in your pocket.

What I have found is many land lords do not value their time properly and so fail the criteria of being an "investor". An investor is one who allocates capital. They do this, but they also fix stuff and self-manage and fail to pay themselves for either task. I used to do that too, so no fuss, no foul, no condemnation. Simply put, though, if you goal is to INVEST, you must account for all costs. If you want to buy yourself a job as a maintenance man and manager...then by all means do so. But be aware that's what you're doing.

Multi-fam has a lot of pluses: one site to go to. Multiple units acquired vs. one at a time, potential to "force" appreciation by raising NOI through cost reductions and/or rent raises. It also has some minuses: more tenant drama is probably the worst. I would find a tenant who is competent and capable to be a part-time assistant manager to handle the day-to-day stuff and shield you from every 1 AM call that, "So 'n so in unit 102 is blasting their stereo!"

Best wishes!

Not sure if you are looking to buy apartment in a building or a whole building.

Single family scenario is not working in my area, so I am looking at apartments or multi family.

If you are looking to buy apartment in a building- you need to check if you can rent it out. Many coop and even some condo is not allowing to rent apartments or they require board approval. Also you need to check maintenance fee for your calculations. It will never go down - just up, up, up! Sometime it could be additional cost for the building lobby renovation or a new playground cost. From the other point you will have a super attendant available.

People in apartments are different ( I am one of them).

Just remind them from time to time that they lived in the apartment and, yes, they have neighbors.

Maybe I am missing out on something Linda. Do the hundred dollar bills look differently when they are made in Texas as opposed to a market place like Kansas or Central Illinois?

If you do want to invest in a local complex, why not start a direct mail campaign targeting out of state owners in your home town?