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Although apartment rentals are considered residential property, if you are planning on investing in an apartment building and renting to others in an attempt to capitalize on property appreciation, you are, in fact, participating in commercial real estate investing. Any time you invest in property strictly to make money, it can be construed as a commercial venture. Some individuals purchase condominium units with the intent of renting them out to others. Before purchasing a condominium for rental you should make sure that the bylaws do not prohibit rentals to third parties. Make sure that the association does not prohibit renters. One of the problems associated with commercial real estate investing of this type is finding qualified renters who are conscientious about paying their rent in a timely manner. It can be very tine consuming to evict someone who is not paying and they may, in turn, end up doing substantial damage to the property. It is always a good idea taking at least a month of security deposit from any renter. Another negative aspect about this type of commercial real estate investment is that renters do not necessarily take care of property as they would if they owned the property. In most cases, you should expect that some repairs will be necessary after they move out. Some places are left in such a state that they need a heavy-duty cleaning. To make this property investment profitable, basic knowledge in building maintenance is necessary. You can also choose to have one of your renters, who is handy, to get a discount on his rent if he maintains the building and acts as custodian. Choosing to live on your rental property gives you the advantage of being able to oversee your tenants. You can also do the maintenance repairs yourself and save money by not paying someone else to do them. It is possible to have your mortgage covered by the rent your receive. This allows you to live rent free while still owning the property. You have the potential to accrue a significant amount of equity in commercial real estate if you reside there long enough to pay off the debt owed and it is in an area of growth. Not everyone is suited to the life of renting an apartment. You have to like to work with people and it is helpful to know how to do basic maintenance. In order to perform simple maintenance, one should be knowledgeable in plumbing and minor electrical repair. Other, more substantial problems, may have to be contracted out. This is the reason it is crucial to have a thorough property evaluation prior to purchasing this kind of commercial real estate investment. Something else that is very helpful when dealing with apartment rentals is performing credit checks for each potential renter. An eviction notice will need to be served by your lawyer if your renter is not making their monthly payments.
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