Investing in real estate is one of the smartest ways to diversify your portfolio and create immense value. And depending on your level of capital and involvement in the project, there are several different property types to choose from. Owning an apartment building may seem daunting at first, but it can actually provide a host of financial benefits and will turn into a more streamlined operation once you’re up and running. Here, Muller Insurance has laid out the advantages you stand to reap by deciding to purchase an apartment building.
Additional Streams of Income
Operating a multi-family dwelling may seem complicated at first, but the hard work is offset by the amount of income you can collect as compared to a single-family home. Technically, any structure that houses more than one family is classified as an apartment, so you have a lot of leeway on how many units you want to be responsible for.
If you are willing to take on more risk and work, you can collect dozens of income streams from families paying the rent with a larger building, increasing your equity greatly. This will make it easier to finance your building because your income level will be less unpredictable than with just one or a handful of income streams.
Benefitting from Capital Appreciation
Another reason that investing in real estate is so lucrative is the amount of value appreciation that property often enjoys, and this is especially true when it comes to apartment building ownership. If you properly manage your apartment building and increase the demand for tenants, you can eventually raise the rent and fill units for longer periods of time – and at a higher rate. This gives you reliability and an increased stream of income that only makes your investment more valuable if you want to sell down the line.
Several Tax Advantages
Being the owner of an apartment building also grants you access to beneficial tax breaks that are designed to incentivize owning property. You can enjoy a qualified business deduction of 20% when you purchase an apartment building, which helps you to start earning money much quicker.
In addition, your expenses are deductible immediately or through depreciation, also helping you to save money. You may even incur fewer expenses by operating more units because you can spread costs over each apartment, as well as take advantage of economies of scale.
Protect Your Assets with Muller Insurance
It’s generally considered wise to have investments in several different areas so you can limit your financial risk if one of them goes south. Financial experts recommend about 20% of your portfolio to be in real estate, making apartment buildings an attractive choice.
Another way you can protect your financial benefits from your apartments is through apartment building insurance. Muller Insurance offers comprehensive policies that will cover you throughout a wide variety of risk factors, including theft, damage from fires and storms, and much more. Start the process of getting covered by contacting one of our representatives at 201-659-2403 today.