Apartment Building Income and Expense Analysis – Your X-Ray of Financial Health

Article submitted by Jim Allen,  Sales and Leasing Agent at Saurage Rotenberg Commercial Real Estate

Article written by Ted Karsch [March 25, 2008 / ezinearticles.com ]

Apartment Building Investments

As the residential real estate market continues to decline many real estate investors have been attracted to what might be the next great financial market to boom: apartment buildings. An ancient Chinese blessing says “may you live in interesting times”. Well, if interesting times are to be seen as a blessing then the real estate market must be full of opportunity. We probably haven’t seen a real estate market this “interesting” since the 1950’s.

When it comes to apartment building investments versus single family home investments I have found that it is easier to make a sound financial judgment about apartment building investments over single family homes. The reason is simply because when you purchase an apartment building you have the ability to view the historical financial statements. These financial statements are called the income and operating expenses and the purchaser of the apartment building can usually obtain these financial statements going back three years. The great thing about viewing the financial statement is that you get to see exactly what the gross income and expenses have been over the past three years. This allows you, the investor, to determine approximately what the property is worth as well as what the expected rate of return will be.

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Jim Allen earned his bachelor’s degree from Baylor University in Waco, Texas and his masters from Louisiana State University.  In addition to his multiple degrees he has taken numerous coursework in banking, marketing, accounting, and business law.  As a complement to his sales experience, Jim also has 25 years experience in commercial real estate financing.

Saurage Rotenberg Commercial Real Estate is a member of the Baton Rouge Area Chamber of Commerce (BRAC); the West Baton Rouge Chamber of Commerce; the Baton Rouge Better Business Bureau; the Louisiana Commercial Data Base (LACDB); and the International Council of Shopping Centers (ICSC). Several agents, on an individual basis, are members of the Society of Industrial and Office Realtors® (SIOR), the Certified Commercial Investment Member Institute (CCIM); the National Association of REALTORS® (NAR); and the Greater Baton Rouge Association of REALTORS® Commercial Investment Division (CID).