Some people take owning an apartment building as their opportunity to unleash their internal interior designer. It’s like the building becomes their personal canvas to show off their taste in decorating. Don’t be one of those people. The only way to make a rational decision about spending money to improve your building is to determine … Continue reading “How to add value to your apartment building”
Category: Real Estate Math
What the %#&^ is a “cap rate”?
Can’t remember what a “cap rate” is? Put simply, it’s the return you get on a building in one year, ignoring the financing. To calculate a return, you need to know how much profit you get in one year in exchange for investing a certain amount of money. So, for example, if you invest $1,000,000 … Continue reading “What the %#&^ is a “cap rate”?”
How do apartment buildings increase in value? And how can you benefit?
When you put a bunch of money and time into an asset, you want it to increase in value. Obviously. So you might ask: How does an apartment building increase in value? Remember: An apartment building investment made correctly should cashflow to you every month, so you make money as you go along. But an … Continue reading “How do apartment buildings increase in value? And how can you benefit?”
Rules of Thumb for Los Angeles Apartment Buildings
Get this through your head: Every apartment building is different. Even literally identical buildings differ because they are by definition located on different pieces of land. That being said, there are some simple rules of thumb for quickly coming to grips with the numbers behind a building: Cap rates in Los Angeles currently range from … Continue reading “Rules of Thumb for Los Angeles Apartment Buildings”