A couple of years ago, my husband and I discussed purchasing rental property in lieu of our first home. Our primary interest was in apartment or condominium buildings. The idea came from one of my husband’s former college classmates who held significant income generating rental properties. We were impressed that such properties generally paid for themselves through rental income. Although we ultimately decided to purchase a home, we are now considering rental or other income generating properties again.
In light of the real estate market down turn, there are now many bargains to be had in the commercial real estate market. We have yet to determine the best type of project to pursue. We suspect that condominium conversion projects may be a good choice with great potential. However, we are nervous about the conversion costs. My husband prefers to focus on apartment buildings. In his view, you have not made a successful investment unless the asset pays you money. This is one of the primary benefits of good apartment buildings. If the property is well run, oftentimes the rental income pays for any mortgage as well as maintenance and property taxes.
We think an ideal investment would be a property that we could lease to a retail business or office. In our experience, such properties tend to be on the expensive side, however. Thus, key for us would be identifying something that we could afford.