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$2.5 million dollars doesn’t buy alot these days

July 18th, 2007 by Kenric

I spent the day in Houston looking at apartment buildings.  Apartment buildings, like single family homes very greatly in quality, style and condition.  Remember when you went shopping for homes in a certain price range and you’d go into a home asking $250,000 and think, this is pretty nice, then you visit another home and think, I can’t believe this owner is asking $275,000 when the one down the street is larger and so much nicer.

That’s the thought running through my mind as I went from apartment to apartment.  The first place I saw was asking $2.5 million and about 90 units.  The property manager claimed that they had 1 vacant unit so that’s what she showed us.  When she opened the door the stench from the unit was so strong that I gagged.  She said, “This one still needs to be cleaned.”  She opened another unit that was rented but not moved in yet and it smelled exactly the same.  People pay $625/mo to live in this?  The area wasn’t that great either.  It seemed like many residents didn’t have daytime jobs and were content spending the day hanging around the complex.  Definitely a D class area although the realtor said it was C.

Fast forward to a different apartment building similar price, greater number of units.  Larger one bedroom units, nicer area, nicer amenities and just overall better looking.  Rent, $470 for a 1 bedroom.

Part of me wonders if the sellers tell the office managers to tell potential buyers that they get $625/mo for each 1 bedroom when they really get $500.  I just can’t figure out how the crappiest place I saw in the worst area got the most rent.

There were a couple ones that fit the bill.  I’ll have to look at them closer tonight and tomorrow.  In my brief one day’s worth of experience in looking at large apartments, I learned alot. 

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