How do you choose a location to build your next apartment complex???
Hello BP world. My name is Chad King and I am looking for some advice. I am looking to purchase land to build a new apartment complex and was wondering what necessary things you guys look for in finding the right location. Do you look for population growth? Accessibility to highways? Avg medium income? What are your thoughts in locating the right area for I am very interested to hear. Thank you very much in advance!
I have always thought about building an apartment complex in the school district where I live. The district is very popular but very small- lots of farms but not much invemtory in terms of homes. I know that I could easily rent out an apartment building. I konw that my idea is super basic but might be worth consdiering if your area has any places people want to live with very little housing options. Just a thought
#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
- Investor
- Austin, TX
- 5,506
- Votes |
- 9,861
- Posts
#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
- Investor
- Austin, TX
Real estate investment companies spend a lot of money and have lengthy reports that outline every single thing you could possibly think of in their feasibility studies. Get an example report from a company.
Quote from @Eliott Elias:
Real estate investment companies spend a lot of money and have lengthy reports that outline every single thing you could possibly think of in their feasibility studies. Get an example report from a company.
That is a great idea... I appreciate it.
So I have the same feelings. I know there are many different avenues to go down and how to look for locations, but sometimes I feel like the small towns that have no real inventory are being over looked. People will always need housing so it makes sense to me to put the housing near an area where you know people will be looking. You could always try to build something on the smaller side say.... 6-10 unit building and see how that works for you. If its something that provides good cash flow, build one more. I appreciate your input.
@Chad King Agreed. We have no inventory here. Literally two homes for sale in the entire school distrcit. But people want to be here. They had to cut off open enrollment becuase the district hit their cap at 66 kids. Empty store fronts downtown were renting their buidlings as residential instead of commercial because of the demand. Yet even though our district is popular, when you graduate between 65-80 kids/year, we definitly get overlooked. There could be similar places in your area that could be golden opportunities that others are not even considering. I'm sure you understand that as a Realtor- sometimes you just need ot think touside the box :)
#3 Multi-Family and Apartment Investing Contributor
- Cincinnati, OH
- 2,975
- Votes |
- 3,348
- Posts
#3 Multi-Family and Apartment Investing Contributor
- Cincinnati, OH
@Chad King, what size are you talking about?
Granted, I am not a developer, but know several who are building/have built apartment complexes. Granted these are large: 100+ unit developments, and they are in markets these developers know well, so a lot of the background info is known from living in the market.
The biggest driver is: is there demand for the submarket? Many of the developments I see around me lately in Cincinnati, have been in more working class areas that do not have great schools, but they are on the periphery of popular areas. The primary demographic for these new developments are young professionals. Schools are not an issue, generally, if your demo is retirees or young professionals.
Access is important, but again it is a balance. People want convenience, but also prefer not to back up to the highway.
And population growth is tricky. If there isn't new product in an established market, how can you have population growth.
Lastly, I am not sure if you were thinking of a 6-10 unit development, but for a lot of new development today, without any government subsidies, the deal won't underwrite. Between land acquisition costs, building materials, and labor, the viable rents do not make the deal pencil on the front end, regardless of all the needs.
