Property Research

Before Buying

Here are some questions an investor should ask owners before buying an older Class C or less apartment building:

About the building:

• What is the age and condition of the building?
• What are the major systems (roof, plumbing, electrical, HVAC, etc.) and when were they last updated?
• Have there been any major repairs or renovations in recent years?
• Are there any known deferred maintenance issues?
• What is the occupancy rate?
• What are the average rent and vacancy rates for comparable buildings in the area?
• Are there any rent controls in place?
• What are the property taxes and insurance costs?
• Are there any special assessments or other liens on the property?

About the tenants:

• What is the tenant mix? (Section 8, students, working class, etc.)
• Are there any tenants with long-term leases?
• Are there any tenants with problem behavior?
• What is the eviction rate?

About the neighborhood:

• What is the crime rate in the area?
• What are the schools like?
• Are there any new developments or businesses planned for the area?
• Is the neighborhood gentrifying?

About the owner:

• Why are they selling?
• How long have they owned the building?
• What have they done to maintain and improve the building during their ownership?
• Are they willing to share their financial records for the building?

In addition to these general questions, investors should also ask specific questions about the building and neighborhood that are relevant to their investment goals. For example, if the investor is planning to renovate the building, they should ask about the zoning requirements and permitting process. If the investor is planning to target a specific tenant mix, they should ask about the demographics of the neighborhood and the demand for different types of rental housing.

It is also important to get the answers to these questions in writing. This will help to protect the investor in the event that there are any problems with the building or the sale after the transaction is closed.