Long term care expenses are a part of the American medical system that can bankrupt a family. In "Makeovers: Five Families Start Fresh," an article in Money magazine by Sarah Max and Donna Rosato,small apartments buildings real estate investing it was advised that long term care insurance be purchased to protect assets.

 Assembling a portfolio of small apartment buildings can for provide for long term needs in better ways, though. 

The best method for preparing to finance long term expenses with small apartment buildings is to be a passive investor with a long term approach.  Passively investing with more experienced professionals will prevent costly errors.  Jerry Cohen, President and Founder of EquityBuild, a real estate investment firm, has been a principal in more than 1000 transactions since 1984, many of which have included small apartment buildings.  When moving to pay for long term expenses, there is little room for error.  Passively investing with seasoned experts like those with EquityBuild protects against these types of losses.

By deploying a long term strategy, time is put on the side of the owner of small apartment buildings.  Rent increases in the United States about 5% annually.  Even during The Great Recession, when stocks and bonds plunged in value, the level of rental income in the United States still rose.

Increasing at 5% a year means that rental income will double in less than 15 years.  If there were a 15-year mortgage on the small apartment building, it would be paid off at about the same time the amount of rental income received had doubled.  So if $1000 a month was received from each apartment in a four-unit building in year one, by the end of fifteen years, over $100,000 annually would be produced in free cash flow!

What could make the returns ever higher is if the small apartment building were held in a retirement account.  When held in a retirement account such as an individual retirement account (IRA), the rental income is tax free.  If the small apartment building were sold for a profit, there would be no taxes on the gains, either.

If the apartment building has four units or less, it can be purchased as a primary residence, so long as the owner lives in it.  That means a mortgage can be obtained at a lower rate with a smaller down payment.  That takes place as primary residences are safer loan customers than second homes or investment properties.

As a passive investor with a long term approach, building a portfolio of small apartment buildings could be very rewarding.  Adding one a year creates a significant holding of small apartment buildings in short time period.  Committing to the long term means that when the mortgages are paid off, the rental income received in free cash flow.  That can be utilized to buy the next small apartment building.  The rising rent each year facilitates the purchases of additional small apartment buildings, too.  With this approach, there is soon a portfolio of small apartment buildings producing the income to meet not only long term care needs, but many more!