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The first step in looking at your hold or buy options in any market is to consider what type of return an apartment investment should produce in a "normal" market over a ten year holding period. It didn’t have to be ten years, that’s just what we’re using for this example.
The return we’ll calculate is the pre-tax, leveraged, internal rate of return (IRR). Using that as your baseline, you can then decide if investing in this market today makes sense, given the negative market expectations for the next year or two.
By a normal market we mean the type of market most apartment investors assume exists, whenever they do any long term estimates. In other words, a market where ...
