- Centurion Member
- Posts: 204
- Joined: Tue Oct 30, 2012 10:25 am
- Location: TX
I'm thinking about buying an apartment complex in the next five years within a 100 mile radius of my home. Right now, I'm just window shopping. I'm looking at the age of the buildings, any recent renovations or improvements, the price per unit, the cap rate, occupancy numbers, number of units per complex, location, what sort of rents they pull in, etc, just to get an idea of what's usual for the area.
A major factor is going to be local bureaucracy. In my current locale, I rent out SFH's. I have to abide by federal law and I have to abide by state law. Good enough. But many of the markets I'm looking at have a ton of city ordinances that dictate all sorts of things... registration of my units (plus registration fees), mandatory recycling where I have to enter into a contract with an independent recycling company, annual inspections, annual inspection fees, reinspections plus reinspection fees, permits, how-many-unrelated-people-can-share-a-house, how-many-people-of-what-age-and-what-gender-can-share-a-room, what sort of locks I need to use, what sort of fences I need to surround my property with, what sort of security lighting I need, mandatory classes about crime prevention plus fees for attending those classes, how I need to have an emergency contact who can arrive at the property within 1 hour's time, etc, etc, etc.
Does all that really make me want to invest in that community?
Infrastructure is static. Once it's placed somewhere, it stays there. People are mobile. If people don't think that a place is the right climate for pursuing whatever business they're in, it won't matter how awesome the roads, parks, bridges, etc are... and they move elsewhere, and people get to build awesome new infrastructure somewhere else. Of course, it's not that straightforward because in your example, it's the federal government's dollar that's at stake, rather than purely private money. But I don't think that "thrifty" has been associated with government spending in a very long time. :oP