Apartment loans are made by considering not only the value of the building and the land where the apartment is located, but also by evaluating other important factors. First is the income potential of the apartment property. Funding for apartments is closely tied to the number of units available for rent, the amount each unit will rent for, and the estimated occupancy rate of the complex.
Other factors to look at when considering apartment loans are the quality of the property and the strength of the borrower. Location is as important in financing apartments as it is in purchasing and developing other real estate. The borrower’s credit and experience with apartment projects and managing multiunit complexes are taken in to account.
Apartments can be a great source of long term revenue and can be an appreciating asset. Often overlooked is the need for dedicated and knowledgeable management, both of the physical property and the finances of the project. Apartment loans can help with building new units, as well as remodeling or expanding existing units.