Annual per unit expenses for Class C Buildings

3 Replies

Hello All,

I'm looking for apartment buildings in the New England Area.  With valuations being what they are, Class C buildings seem closer to my target acquisition costs than Class B.  As I look at various numbers, I'm curious what is a good ball park per unit annual expense in this category.

Say in a 6-12 unit building with gas heat.  Average 2 beds.

I seem to see an average of $5500 in MA.  Would love to hear from buy and hold investors in Rhode Island and Connecticut!

Thanks in advance!

Hi "Joe," welcome to the site. The New England Area, as you can imagine by any area that encompasses 6 states, has a diverse range of markets, from A to B to C class and everywhere inbetween.

It's tough to provide any numbers without further information.

I would recommend you search for apartment deals on Loopnet, and start doing research in more defined markets/regions/metropolitan areas to compare the values, price per unit, expenses per unit, NOI, Cap rates, and any other helpful datum.

Good luck!

P.S. If that's your real name we need to hang out.

Hi Rob,

Thanks for the response.  I have been doing as per your suggestion. Looking for comparable properties on Loopnet etc. Seems like most are understating the expenses.  For comparison (in CT) with a couple of Class C properties in MA, this is what I have found thus far:

Stabilized Western MA properties

1.   Vacancy - As low as 5% (with 25-35% Section 8)

2.  Expenses per unit (Self-Managed) - $5000/yr. With Gas heat/hw paid by owner

3.  Property Mgmt fee - 7.5% to 15% of collections based on the size of the company

I will post this on the CT forum as well.  I'm trying to find out what the Class C-D numbers are for real in the Greater Hartford area.  Also Prop Taxes in Hartford in particular seem to be twice on average than everywhere else.  Water/Sewer seem comparable

PS: My real name is too long. Hence Joe :) We can still hang out.  People with long names can be fun share a few beers with as well! lol.

I wouldnt mind checking out that guys night out. I can imagine the prices in CT are more than MA. Did you use any other data than loopnet? Have you looked at rentometer? I have heard this is also a good place to see about prices and comps (as far as rents are concerned). Are you also comping off of the MLS at all?

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