3 Reasons to Stay Away From Flat Roofs

In Investment Strategy by Tim DieselLeave a Comment

There are three really good reasons why commercial real estate investors should stay away from flat roof apartments. If you’re new to commercial real estate investing, you’re probably wondering about the best types of multifamily assets and which to avoid. That’s understandable because you’re factoring risk into the equation. And, it’s smart to look at all options so you are in-the-know and make more savvy decisions with your money.

What’s the Difference between a Flat Roof and a Pitched One?

Other than the obvious, what’s the real difference between a flat roof and a pitched roof? We’ll, let’s start with the obvious first. A flat roof is just that — it’s flat. (Think of the typical retail store.) The reason flat roofs even exist is largely to do with cost. No surprise, huh? Flat roofs are comparatively cheap than their pitched counterparts.

Just the way you likely wouldn’t put money into a mutual fund or ETF without first checking its performance, neither should you jump on an investment property without checking what your potential return might be. It’s important to remember that truly understanding your ROI can be extremely complex, and you’ll likely have to tailor any estimates to your individual situation. —Forbes.com

Also, flat roofs have another advantage — functional space. This is the very reason you see air conditioners on top of flat roofs so often. It creates a dedicated space for such systems. And, a flat roof can also be used by people — just think of a rooftop terrace. Yet another benefit of a flat roof is it provides more versatility for the interior space below. Since there are no weird angles, there’s more ability to customize the interior layout.

3 Reason Why Commercial Real Estate Investors should Stay Away from Flat Roof Apartments

So, if flat roofs have these distinct advantages, why do the majority of commercial property investors stay away from them? Here are the three biggest reasons commercial property investors avoid flat roof apartments:

  • Flat roofs have shorter lifespans. The typical flat roof has a much shorter average lifespan than a pitched roof. In fact, about 10 years less performance than a pitched roof. And, because replacement is so very costly, this is a really big deal. Enough so, that an older flat roof can easily be a deal-breaker.
  • Flat roofs require more maintenance. Flat roofs do not drain nearly as well as pitched ones — it’s just that simple. This means flat roofs hold debris, which rots and causes damage. Over time, this means a whole lot more maintenance expenses.
  • Flat roofs can present an insurance problem. Commercial property investment means insurance is a huge part of the process. And, flat roofs just aren’t the most appealing to insurers.

If you’d like to learn more about commercial real estate investment benefits and more about the buying process, please contact me.


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