Looking for (and finding) the right investment for your portfolio can be a tedious and exhausting experience. After all, there are many different types of investments that exist for each investor. You have likely heard about success stories with day-trading or people flipping houses for a sizeable profit. But the reality is that not every successful investment for one person makes it a smart investment decision for someone else. Just like each of our portfolios, each investment is unique and should be evaluated fully and thoughtfully before endeavoring in it. Given the large number of investment prospects in 2021, the number of people flocking to value-add apartment investing opportunities makes it stand out as a confident strategy. 

Value-add apartment investing comes down to four steps: finding the right underperforming property, adding value, stabilizing the investment, and then ultimately selling for a profit. But why is value-add apartment investing a smart decision in 2021? Let’s look at three primary reasons. 

Manageable Risk 

One of the top reasons people choose to enter the world of value-add apartment investing is because it allows for manageable risk compared to other types of investments where the risk can be quite high and difficult to manage. Value-add apartment investing gives you, as the investor, complete control over finding the right property in which to invest, along with brainstorming the cost and type of value that you can add. For example, some apartments simply need exterior cosmetic repairs, while some need appliance refreshes or even complete renovation overhauls. It is important to understand the market where the building is situated, along with the amount of investment that the building will need to make it an attractive location and fetch the price tags that will make the investment worthwhile. 

With proper and thorough market research, you will have the ability to make careful decisions each step of the way during the investment process. 

Passive Income 

Investors are always looking for new passive income streams—that is to say, new ways of generating income without having to work. Value-add apartment investing is a great way to do this. Of course, as with most investments, there is a certain amount of upfront sweat equity that will be required to reap the complete benefits of the passive income from value-add apartment investing, including researching and finding the property and then putting the time, effort, and money into renovations. However, once the property has been acquired and the value has been added, you can hire a qualified property manager and then sit back and allow the new apartment building to make money for you. 

Development of Technology 

There are so many investment opportunities out there that require hands-on experience or attention to make them successful. With value-add apartment investing, once you put in the work and money up front, you can utilize some excellent emerging software to help you to manage your new property with a much more hands-off approach. The best property managers make their properties function as efficiently as possible, using some of the best rental property software applications that are available in the market. It is simply one more way that you can make a value-add apartment investment the right choice for your portfolio. 

For more information about value-add apartment investing from trusted industry experts, visit the Coastline Equity news section.