Evaluating Apartment Location

2 Replies

Hello I am still new to this real estate business and I am wondering if it is prudent for a newbie to buy their first multi-unit apartment building on a block full of competing apartment buildings or should the approach be to buy an apartment on a different area of town where there are little to no competitions?

More competition means there's a demand. The question is if the demand is being met?

Check rental rates. If there are a plethora of apartments, see how many vacancies they have and what their rates are - you'll get an idea if the area's oversaturated based on percent of vacancy. And you'll get an idea for what you'll be grossing in rents.

Having less competitiong is nice but does that also mean there's less tenants? Will you be fighting for scraps? Again you'll need to check the rental rates and vacancy rates to know.