UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   Form 10-KSB

[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934


                 For the fiscal year ended December 31, 2004


[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934


               For the transition period _________to _________

                         Commission file number 0-10256

                              SHELTER PROPERTIES II
                 (Name of small business issuer in its charter)

      South Carolina                                             57-0709233
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                         55 Beattie Place, P.O. Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)

                                 (864) 239-1000
                            Issuer's telephone number

        Securities registered under Section 12(b) of the Exchange Act:

                                      None

        Securities registered under Section 12(g) of the Exchange Act:

                      Units of Limited Partnership Interest
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act of 1934 during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes X No___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.  $5,340,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests, as of December 31, 2004. No market exists for the limited partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.


                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None

The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending   claims  and  any  adverse   outcomes  and   possible   environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

                                     PART I

Item 1.     Description of Business

Shelter Properties II (the "Registrant" or the "Partnership") was organized as a
limited partnership under the laws of the State of South Carolina on October 10,
1980.  The general  partner  responsible  for  management  of the  Partnership's
business is Shelter Realty II  Corporation,  a South Carolina  corporation  (the
"Corporate General  Partner").  The Corporate General Partner is a subsidiary of
Apartment  Investment and Management Company  ("AIMCO"),  a publicly traded real
estate investment trust. The other general partner is AIMCO Properties, L.P., an
affiliate of the Corporate General Partner and AIMCO. The Partnership  Agreement
provides  that the  Partnership  is to  terminate  on  December  31, 2020 unless
terminated prior to such date.

The  Partnership is engaged in the business of operating and holding real estate
properties  for  investment.   In  1981,  during  its  acquisition   phase,  the
Partnership  acquired  five  existing  apartment  properties.   The  Partnership
continues to own and operate two of these  properties.  See "Item 2. Description
of Properties".

Commencing February 2, 1981, the Partnership offered, pursuant to a Registration
Statement filed with the Securities and Exchange Commission,  up to 27,400 Units
of Limited Partnership  Interest (the "Units") at a purchase price of $1,000 per
Unit with a minimum  purchase of 5 Units ($5,000),  or 1.5 Units ($1,500) for an
Individual  Retirement  Account.  An additional  100 Units were purchased by the
Corporate General Partner. Since its offering, the Partnership has not received,
nor are limited partners required to make, additional capital contributions.

The offering terminated on April 30, 1981. Upon termination of the offering, the
Partnership  had accepted  subscriptions  for 27,500 Units,  including 100 Units
purchased by the Corporate General Partner, for an aggregate of $27,500,000. The
Partnership invested approximately $21,000,000 of such proceeds in five existing
apartment  properties.  Prior to December 31,  2004,  the  Partnership  sold two
properties and lost one property to the lender through foreclosure.

The Partnership  has no employees.  Management and  administrative  services are
provided  by the  Corporate  General  Partner  and  by  agents  retained  by the
Corporate  General  Partner.  An affiliate of the Corporate  General Partner has
been providing such property management services.

Risk Factors

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's properties.  The number and quality of competitive properties,
including  those which may be managed by an affiliate of the  Corporate  General
Partner,  in such market area could have a material  effect on the rental market
for the  apartments at the  Partnership's  properties  and the rents that may be
charged  for such  apartments.  While  the  Corporate  General  Partner  and its
affiliates  own and/or  control a significant  number of apartment  units in the
United  States,  such  units  represent  an  insignificant  percentage  of total
apartment  units in the United  States and  competition  for the  apartments  is
local.

Laws benefiting  disabled persons may result in the Partnership's  incurrence of
unanticipated  expenses.  Under the Americans with  Disabilities Act of 1990, or
ADA,  all places  intended to be used by the public are required to meet certain
Federal  requirements  related to access and use by disabled persons.  Likewise,
the Fair Housing Amendments Act of 1988, or FHAA, requires apartment  properties
first occupied after March 13, 1990 to be accessible to the  handicapped.  These
and other  Federal,  state  and  local  laws may  require  modifications  to the
Partnership's   properties,   or  restrict   renovations   of  the   properties.
Noncompliance  with  these laws could  result in the  imposition  of fines or an
award of  damages  to private  litigants  and also  could  result in an order to
correct any  non-complying  feature,  which could result in substantial  capital
expenditures.   Although  the  Corporate   General  Partner  believes  that  the
Partnership's  properties  are  substantially  in  compliance  with the  present
requirements,  the Partnership may incur  unanticipated  expenses to comply with
the ADA and the FHAA.

Both  the  income  and  expenses  of  operating  the  properties  owned  by  the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar  properties  resulting from various
market  conditions,  increases/decreases  in unemployment or population  shifts,
changes in the availability of permanent mortgage  financing,  changes in zoning
laws,  or changes in patterns or needs of users.  In  addition,  there are risks
inherent in owning and operating residential  properties because such properties
are  susceptible to the impact of economic and other  conditions  outside of the
control of the Partnership.

From time to time, the Federal Bureau of  Investigation,  or FBI, and the United
States  Department  of  Homeland  Security  issue  alerts  regarding   potential
terrorist threats  involving  apartment  buildings.  Threats of future terrorist
attacks,  such as those  announced  by the FBI and the  Department  of  Homeland
Security,  could  have a  negative  effect on rent and  occupancy  levels at the
Partnership's properties. The effect that future terrorist activities or threats
of such activities could have on the  Partnership's  operations is uncertain and
unpredictable. If the Partnership were to incur a loss at a property as a result
of an act of  terrorism,  the  Partnership  could  lose all or a portion  of the
capital  invested  in the  property,  as well as the  future  revenue  from  the
property.  In this regard, the Partnership has purchased insurance to cover acts
of terrorism. The Corporate General Partner does not anticipate that these costs
will have a negative effect on the Partnership's  financial condition or results
of operations.

There have been, and it is possible there may be other, Federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.

The Partnership  monitors its properties for evidence of pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental  testing has been performed which resulted in no material  adverse
conditions or liabilities.  In no case has the Partnership  received notice that
it is a potentially  responsible party with respect to an environmental clean up
site.

A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation"  included in "Item 6" of this Form
10-KSB.

Item 2.     Description of Properties

The following table sets forth the Partnership's investments in properties:
<TABLE>
<CAPTION>

                                     Date of
Properties                       Purchase         Type of Ownership           Use

<S>                              <C>   <C>
Parktown Townhouses              03/01/81    Fee ownership, subject to   Apartment
Deer Park, Texas                             first mortgage              309 units

Signal Pointe Apartments         06/30/81    Fee ownership, subject to   Apartment
Winter Park, Florida                         first mortgage              368 units
</TABLE>

In December 2003, the Partnership sold Raintree Apartments to a third party, for
a gross sale price of $4,680,000.  The net proceeds  realized by the Partnership
were  approximately  $4,546,000  after payment of closing costs. The Partnership
realized  a gain of  approximately  $3,279,000  as a result of the sale which is
shown as gain on sale of discontinued  operations.  In addition, the Partnership
recorded a loss on early  extinguishment of debt of approximately  $812,000 as a
result of the  write-off of  unamortized  loan costs and a  prepayment  penalty,
which is included in loss from discontinued operations.

Schedule of Properties

Set forth below for both of the  Partnership's  properties is the gross carrying
value, accumulated depreciation,  depreciable life, method of depreciation,  and
Federal tax basis.
<TABLE>
<CAPTION>

                     Gross                                      Method
                    Carrying    Accumulated    Depreciable        Of         Federal
Properties           Value      Depreciation      Life       Depreciation   Tax Basis
                        (in thousands)                                     (in thousands)

<S>                 <C>           <C>           <C>                           <C>
Parktown            $15,694       $ 7,752       5-35 yrs         S/L          $4,990
Townhouses
Signal Pointe
   Apartments        14,058        10,270       5-37 yrs         S/L           2,729
     Totals         $29,752       $18,022                                     $7,719
</TABLE>

See  "Note  A" to the  financial  statements  included  in  "Item  7.  Financial
Statements"   for  a  description   of  the   Partnership's   depreciation   and
capitalization policies.

Schedule of Property Indebtedness

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Partnership's properties.
<TABLE>
<CAPTION>

                               Principal
                               Balance At       Stated
                              December 31,     Interest       Period        Maturity
Property                          2004         Rate (1)      Amortized      Date (2)
                             (in thousands)
Parktown Townhouses
<S>                              <C>             <C>          <C>           <C>   <C>
  1st mortgage                   $ 7,010         7.21%        20 yrs        01/01/21

Signal Pointe Apartments
  1st mortgage                     7,977         7.22%        20 yrs        01/01/21

           Total                 $14,987
</TABLE>

(1)   Fixed rate mortgages.

(2)   See "Item 7. Financial  Statements - Note B" for information  with respect
      to the  Partnership's  ability  to repay  these  loans and other  specific
      details about these loans.

Rental Rates and Occupancy

Average  annual  rental rate per unit and  occupancy  for 2004 and 2003 for each
property:

                                       Average Annual               Average
                                        Rental Rate                Occupancy
                                         (per unit)

 Properties                          2004         2003          2004        2003

 Parktown Townhouses (1)           $ 9,193       $ 9,524        80%          89%
 Signal Pointe Apartments            7,258         7,187        94%          95%

(1)   The Corporate General Partner attributes the decrease in average occupancy
      at Parktown Townhouses to increased credit standards for tenants.

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly  competitive.  All of the  properties of the  Partnership  are subject to
competition  from  other  residential  apartment  complexes  in  the  area.  The
Corporate  General  Partner  believes that all of the  properties are adequately
insured.  Each  property is an  apartment  complex  which leases units for lease
terms of one year or  less.  No  residential  tenant  leases  10% or more of the
available  rental space.  All of the properties are in good physical  condition,
subject to normal  depreciation  and  deterioration  as is typical for assets of
this type and age.

Real Estate Taxes and Rates

Real estate taxes and rates in 2004 for each property were:

                                                2004            2004
                                               Billing        Rate (1)
                                           (in thousands)

       Parktown Townhouses                      $248            3.31%
       Signal Pointe Apartments                  172            1.69%

(1)   The  rates  are  based  on the  local  authority's  assessed  value of the
      investment properties.

Capital Improvements

Parktown Townhouses

The  Partnership  completed  approximately  $342,000 of capital  improvements at
Parktown Townhomes during the year ended December 31, 2004, consisting primarily
of major landscaping,  swimming pool improvements,  signage,  fencing,  plumbing
fixtures,  parking  lot  resurfacing  and  water  heater,  appliance,  and floor
covering replacements.  These improvements were funded from operating cash flow.
The  Partnership  regularly  evaluates  the  capital  improvement  needs  of the
property.  While  the  Partnership  has no  material  commitments  for  property
improvements  and  replacements,   certain  routine  capital   expenditures  are
anticipated  during 2005. Such capital  expenditures will depend on the physical
condition of the property as well as the anticipated  cash flow generated by the
property.

Signal Pointe Apartments

The  Partnership  completed  approximately  $893,000 of capital  improvements at
Signal Pointe  Apartments  during the year ended  December 31, 2004,  consisting
primarily of air conditioning unit  replacements,  major  landscaping,  casualty
repairs,  appliance  and  floor  covering  replacements,  safety  upgrades,  and
recreational  facility  upgrades.  These improvements were funded from operating
cash flow and  insurance  proceeds.  The  Partnership  regularly  evaluates  the
capital improvement needs of the property. While the Partnership has no material
commitments for property improvements and replacements,  certain routine capital
expenditures  and casualty  repairs are  anticipated  during 2005.  Such capital
expenditures  will depend on the  physical  condition of the property as well as
insurance proceeds, replacement reserves and the anticipated cash flow generated
by the property.

Capital  expenditures will be incurred only if cash is available from operations
or from  Partnership  reserves.  To the extent  that  capital  improvements  are
completed,  the Partnership's  distributable cash flow, if any, may be adversely
affected at least in the short term.

Item 3.     Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its Corporate  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of interests  in certain  Corporate  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition,  during the third quarter of 2001, a complaint  captioned Heller v.
Insignia  Financial  Group (the  "Heller  action")  was filed  against  the same
defendants  that are named in the  Nuanes  action.  On or about  August 6, 2001,
plaintiffs filed a first amended  complaint.  The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a court  appointed
appraiser. An affiliate of the Corporate General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Corporate   General  Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector") filed an appeal (the "Appeal") seeking to vacate and/or reverse the
order approving the settlement and entering  judgment  thereto.  On November 24,
2003,  the Objector  filed an  application  requesting  the court order AIMCO to
withdraw settlement tender offers it had commenced,  refrain from making further
offers  pending  the appeal and auction  any units  tendered  to third  parties,
contending  that the offers did not  conform  with the terms of the  settlement.
Counsel  for the  Objector  (on behalf of another  investor)  had  alternatively
requested the court take certain action  purportedly to enforce the terms of the
settlement agreement. On December 18, 2003, the court heard oral argument on the
motions  and denied them both in their  entirety.  The  Objector  filed a second
appeal challenging the court's use of a referee and its order requiring Objector
to pay those fees.

On January 28, 2004,  the  Objector  filed his opening  brief in the Appeal.  On
April 23,  2004,  the  Corporate  General  Partner  and its  affiliates  filed a
response  brief in support  of the  settlement  and the  judgment  thereto.  The
plaintiffs  have also  filed a brief in support  of the  settlement.  On June 4,
2004,  Objector filed a reply to the briefs  submitted by the Corporate  General
Partner and  Plaintiffs.  In addition  both the  Objector and  plaintiffs  filed
briefs in connection  with the second  appeal.  On March 21, 2005,  the Court of
Appeals issued opinions in both pending  appeals.  With regard to the settlement
and judgment  entered  thereto,  the Court of Appeals  vacated the trial court's
order and remanded to the trial court for further findings on the basis that the
"state of the record is insufficient  to permit  meaningful  appellate  review".
With  regard to the  second  appeal,  the Court of  Appeals  reversed  the order
requiring the Objector to pay referee fees.

The  Corporate  General  Partner  does  not  anticipate  that  any  costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.

As previously disclosed,  AIMCO Properties L.P. and NHP Management Company, both
affiliates of the Corporate General Partner,  are defendants in an action in the
United States District Court,  District of Columbia.  The plaintiffs have styled
their  complaint  as a  collective  action  under the Fair Labor  Standards  Act
("FLSA") and seek to certify state subclasses in California,  Maryland,  and the
District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties
L.P. failed to compensate  maintenance  workers for time that they were required
to be "on-call". Additionally, plaintiffs allege AIMCO Properties L.P. failed to
comply  with the FLSA in  compensating  maintenance  workers  for time that they
worked in responding to a call while  "on-call".  The  defendants  have filed an
answer to the amended complaint denying the substantive  allegations.  Discovery
relating  to the  certification  of the  collective  action  has  concluded  and
briefing in the matter is underway.  Although the outcome of any  litigation  is
uncertain,  AIMCO  Properties,  L.P. does not believe that the ultimate  outcome
will have a material  adverse  effect on its  financial  condition or results of
operations.  Similarly,  the Corporate General Partner does not believe that the
ultimate  outcome  will have a  material  adverse  effect  on the  Partnership's
financial condition or results of operations.

Item 4.     Submission of Matters to a Vote of Security Holders:

During the quarter ended December 31, 2004, no matter was submitted to a vote of
Unit holders through the solicitation of proxies or otherwise.

                                     PART II

Item 5.     Market for the Partnership Equity and Related Partner Matters

The Partnership,  a publicly-held  limited partnership,  offered and sold 27,400
limited partnership units (the "Units") aggregating  $27,400,000.  An additional
100 Units were purchased by the Corporate  General Partner.  The Partnership had
693 holders of record  owning an aggregate of 27,500 Units at December 31, 2004.
Affiliates  of the  Corporate  General  Partner  owned 21,126 Units or 76.82% at
December 31, 2004. No public trading market has developed for the Units,  and it
is not anticipated that such a market will develop in the future.

No  distributions  were made by the Partnership  during the years ended December
31, 2004 and 2003.  Future cash  distributions  will depend on the levels of net
cash generated from operations and the timing of debt maturities,  refinancings,
and/or  property sales.  The  Partnership's  cash available for  distribution is
reviewed  on a monthly  basis.  There  can be no  assurance,  however,  that the
Partnership  will  generate  sufficient  funds from  operations  after  required
capital expenditures to permit distributions to its partners in the year 2005 or
subsequent   periods.   See  "Item  2.   Description  of  Properties  -  Capital
Improvements" for information  relating to anticipated  capital  expenditures at
the properties.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its  affiliates  owned 21,126  Units in the  Partnership
representing  76.82% of the outstanding  Units at December 31, 2004. A number of
these  Units  were  acquired  pursuant  to  tender  offers  made by AIMCO or its
affiliates.  It is possible that AIMCO or its affiliates will acquire additional
Units  in  exchange  for  cash or a  combination  of cash  and  units  in  AIMCO
Properties,  L.P., the operating  partnership of AIMCO,  either through  private
purchases or tender offers.  Pursuant to the Partnership Agreement,  unitholders
holding a majority of the Units are  entitled  to take action with  respect to a
variety of matters  that  include,  but are not  limited  to,  voting on certain
amendments  to the  Partnership  Agreement  and voting to remove  the  Corporate
General  Partner.  As a result of its  ownership  of  76.82% of the  outstanding
Units,  AIMCO and its  affiliates  are in a position  to control all such voting
decisions  with  respect to the  Partnership.  Although  the  Corporate  General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Corporate  General  Partner  also  owes  fiduciary  duties  to AIMCO as its sole
stockholder.  As a result,  the  duties of the  Corporate  General  Partner,  as
corporate general partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Corporate  General  Partner to AIMCO as its
sole stockholder.

Item 6.     Management's Discussion and Analysis or Plan of Operation

This item should be read in conjunction with the "Item 7. Financial  Statements"
and other items contained elsewhere in this report.

The  Partnership's  financial  results depend upon a number of factors including
the  ability to attract  and  maintain  tenants  at the  investment  properties,
interest  rates on mortgage  loans,  costs  incurred  to operate the  investment
properties,  general  economic  conditions  and weather.  As part of the ongoing
business plan of the  Partnership,  the Corporate  General Partner  monitors the
rental market environment of its investment properties to assess the feasibility
of increasing rents,  maintaining or increasing  occupancy levels and protecting
the Partnership from increases in expenses.  As part of this plan, the Corporate
General  Partner  attempts  to  protect  the  Partnership  from  the  burden  of
inflation-related  increases in expenses by increasing  rents and  maintaining a
high overall  occupancy level.  However,  the Corporate  General Partner may use
rental  concessions  and  rental  rate  reductions  to offset  softening  market
conditions;  accordingly,  there  is no  guarantee  that the  Corporate  General
Partner will be able to sustain such a plan.  Further,  a number of factors that
are outside the control of the  Partnership,  such as the local economic climate
and weather,  can adversely or  positively  affect the  Partnership's  financial
results.

Results of Operations

The   Partnership's   net  loss  for  the  year  ended  December  31,  2004  was
approximately  $388,000  compared to net income of approximately  $3,633,000 for
the year ended  December 31, 2003. The decrease in net income for the year ended
December  31, 2004 is due to a gain on the sale of  discontinued  operations  in
2003, a decrease in total revenues and an increase in total expenses.

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
the  accompanying  statement of operations  for the year ended December 31, 2003
reflects  the  operations  of  Raintree  Apartments  as loss  from  discontinued
operations due to its sale in December 2003.

In December 2003, the Partnership sold Raintree Apartments to a third party, for
a gross sale price of $4,680,000.  The net proceeds  realized by the Partnership
were  approximately  $4,546,000  after payment of closing costs. The Partnership
realized a gain of  approximately  $3,279,000 as a result of the sale,  which is
shown as gain on sale of discontinued  operations.  In addition, the Partnership
recorded a loss on early  extinguishment of debt of approximately  $812,000 as a
result of the  write-off of  unamortized  loan costs and a  prepayment  penalty,
which is included in loss from  discontinued  operations.  Included in loss from
discontinued  operations for the year ended  December 31, 2003 is  approximately
$1,005,000 of revenue generated by the property.

Excluding the gain on sale, the  Partnership  recognized a loss from  continuing
operations of approximately $408,000 for the year ended December 2004 and income
from  continuing  operations  of  approximately  $1,177,000  for the year  ended
December 31, 2003.  The decrease in income from  continuing  operations  for the
year ended  December  31,  2004 is due to a decrease  in total  revenues  and an
increase in total expenses.  Total revenues for the year ended December 31, 2004
decreased  due to a  decrease  in rental  income  and due to a  decrease  in the
casualty gains recognized during 2004. Rental income decreased due to a decrease
in  occupancy  at both  properties  partially  offset by a decrease  in bad debt
expense at Signal Pointe Apartments.

During June 2001,  Parktown  Townhouses incurred extensive damage as a result of
severe flooding which affected  certain areas of Texas. The  reconstruction  and
mold remediation of the property took place during 2002 and 2001 and all repairs
were  substantially  complete at the end of 2002.  As a result,  in 2002 the net
assets were  written off and the  Partnership  recorded a casualty  gain for the
insurance  proceeds received in excess of the net assets written off. During the
year ended  December  31, 2003,  additional  insurance  proceeds  related to the
reconstruction of approximately  $527,000 were received and were recognized as a
casualty gain. In addition,  approximately $582,000 was received related to lost
rents, of which approximately $378,000 was recorded as rental income during 2003
in the accompanying financial statements.

During  August  and  September  2004,  one  of  the   Partnership's   investment
properties, Signal Pointe Apartments,  incurred damages from Hurricanes Charlie,
Frances and Jeanne.  The property  incurred  damages from  Hurricane  Charlie of
approximately $196,000. During the year ended December 31, 2004, the Partnership
received  insurance  proceeds of  approximately  $131,000  and wrote off damaged
assets of approximately  $36,000 related to Hurricane Charlie.  This resulted in
the  recognition  of a casualty  gain of  approximately  $95,000.  The  property
incurred damages from Hurricanes  Frances and Jeanne of approximately  $245,000,
which were not covered by insurance proceeds. During the year ended December 31,
2004, the Partnership  recognized a casualty loss of approximately  $43,000 as a
result of the write-off of undepreciated damaged assets. The loss is included in
operating expenses on the accompanying statement of operations. In addition, the
Partnership  incurred  clean up costs  from the three  storms  of  approximately
$312,000, which were not covered by insurance proceeds. These costs are included
in operating expenses on the accompanying  statement of operations.  At December
31, 2004, approximately $290,000 is accrued for these clean up costs.

Total expenses increased for the year ended December 31, 2004 due to an increase
in   operating   expense,   partially   offset  by   decreases  in  general  and
administrative  and  interest  expenses.  Operating  expense  increased  due  to
increases in  advertising,  administrative,  maintenance  and  insurance  damage
expenses. Advertising expense increased due to increased periodicals and leasing
promotions at Signal Pointe  Apartments and increased web advertising at both of
the Partnership's properties.  Administrative expense increased due to increases
in  contract  labor  at  Parktown  Townhouses  and  training  expenses  at  both
investment  properties.  Maintenance  expense  increased  due to an  increase in
supplies and repairs and contract labor at both investment properties. Insurance
damage expense  increased due to hurricane clean up costs,  as discussed  above.
Interest  expense  decreased due to a decrease in the balance of advances due to
affiliate of the Corporate General Partner and scheduled principal payments made
on the mortgages encumbering the Partnership's investment properties.

General and administrative  expenses decreased primarily due to decreases in the
cost of services included in management  reimbursements to the Corporate General
Partner as allowed under the Partnership  Agreement and audit fees. In addition,
costs associated with the quarterly and annual communications with investors and
regulatory agencies are included in general and administrative  expenses for the
years ended December 31, 2004 and 2003.

Liquidity and Capital Resources

At  December  31,  2004,  the  Partnership  had  cash and  cash  equivalents  of
approximately $94,000 compared to approximately $1,381,000 at December 31, 2003.
Cash and cash equivalents decreased  approximately  $1,287,000 from December 31,
2003 due to  approximately  $1,054,000 of cash used in investing  activities and
approximately  $811,000 of cash used in financing activities partially offset by
approximately  $578,000 of cash provided by operating  activities.  Cash used in
investing  activities  consisted  of  property   improvements  and  replacements
partially  offset  by  insurance  proceeds  received.  Cash  used  in  financing
activities  consisted of principal  payments on the  mortgages  encumbering  the
Partnership's  properties  and  repayments  of advances from an affiliate of the
Corporate  General Partner partially offset by advances from an affiliate of the
Corporate  General  Partner.  The  Partnership  invests its  working  capital in
interest bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the investment  properties to adequately  maintain the
physical  assets and other operating needs of the Partnership and to comply with
Federal,  state  and local  legal and  regulatory  requirements.  The  Corporate
General  Partner  monitors  developments  in the  area of legal  and  regulatory
compliance.  For example,  the  Sarbanes-Oxley  Act of 2002 mandates or suggests
additional compliance measures with regard to governance,  disclosure, audit and
other areas.  In light of these changes,  the  Partnership  expects that it will
incur higher expenses related to compliance. The Partnership regularly evaluates
the capital  improvement  needs of the properties.  While the Partnership has no
material commitments for property improvements and replacements, certain routine
capital  expenditures  and casualty  repairs are  anticipated  during 2005. Such
capital  expenditures will depend on the physical condition of the properties as
well as  insurance  proceeds,  replacement  reserves and  anticipated  cash flow
generated by the properties.  Capital expenditures will be incurred only if cash
is available from operations or from  Partnership  reserves.  To the extent that
capital improvements are completed,  the Partnership's  distributable cash flow,
if any, may be adversely affected at least in the short term.

The  Partnership's  assets are thought to be sufficient  for any near term needs
(exclusive  of  capital  improvements  and  hurricane  related  repairs)  of the
Partnership.  The mortgage indebtedness encumbering the Partnership's investment
properties  of  approximately  $14,987,000  is  amortized  over 240 months  with
maturity  dates of January 1, 2021,  at which time the loans are scheduled to be
fully amortized.

No  distributions  were made by the Partnership  during the years ended December
31, 2004 and 2003.  Future cash  distributions  will depend on the levels of net
cash generated from operations and the timing of debt maturities,  refinancings,
and/or  property sales.  The  Partnership's  cash available for  distribution is
reviewed  on a monthly  basis.  There  can be no  assurance,  however,  that the
Partnership  will  generate  sufficient  funds from  operations  after  required
capital expenditures to permit distributions to its partners in the year 2005 or
subsequent periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 21,126 limited  partnership  units
(the "Units") in the Partnership representing 76.82% of the outstanding Units at
December  31,  2004.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Corporate General Partner.  As a result of its ownership of 76.82% of
the outstanding Units, AIMCO and its affiliates are in a position to control all
such voting  decisions with respect to the  Partnership.  Although the Corporate
General  Partner  owes  fiduciary   duties  to  the  limited   partners  of  the
Partnership,  the Corporate  General Partner also owes fiduciary duties to AIMCO
as its sole  stockholder.  As a  result,  the  duties of the  Corporate  General
Partner,  as  corporate  general  partner,  to the  Partnership  and its limited
partners may come into conflict with the duties of the Corporate General Partner
to AIMCO as its sole stockholder.

Critical Accounting Policies and Estimates

A summary of the Partnership's  significant  accounting  policies is included in
"Note A - Organization and Summary of Significant  Accounting Policies" which is
included in the financial  statements  in "Item 7.  Financial  Statements".  The
Corporate  General  Partner  believes that the  consistent  application of these
policies enables the Partnership to provide readers of the financial  statements
with useful and reliable  information about the Partnership's  operating results
and financial  condition.  The preparation of financial statements in conformity
with accounting  principles generally accepted in the United States requires the
Partnership to make estimates and  assumptions.  These estimates and assumptions
affect  the  reported  amounts  of  assets  and  liabilities  at the date of the
financial statements as well as reported amounts of revenues and expenses during
the  reporting  period.  Actual  results  could  differ  from  these  estimates.
Judgments  and  assessments  of  uncertainties  are  required  in  applying  the
Partnership's  accounting policies in many areas. The Partnership  believes that
of its  significant  accounting  policies,  the  following  may involve a higher
degree of judgment and complexity.

Impairment of Long-Lived Assets

Investment  properties  are  recorded at cost,  less  accumulated  depreciation,
unless  considered  impaired.  If  events  or  circumstances  indicate  that the
carrying  amount of a property may be  impaired,  the  Partnership  will make an
assessment of its  recoverability  by estimating  the  undiscounted  future cash
flows,  excluding  interest  charges,  of the property.  If the carrying  amount
exceeds the aggregate  future cash flows,  the  Partnership  would  recognize an
impairment  loss to the extent the carrying amount exceeds the fair value of the
property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's investment properties.  These factors include, but are not limited
to,  changes  in the  national,  regional  and  local  economic  climate;  local
conditions,  such as an oversupply of multifamily  properties;  competition from
other available  multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership will offer rental concessions during particularly slow months or
in response  to heavy  competition  from other  similar  complexes  in the area.
Rental income attributable to leases, net of any concessions, is recognized on a
straight-line  basis over the term of the lease.  The Partnership  evaluates all
accounts  receivable  from  residents and  establishes  an allowance,  after the
application of security deposits,  for accounts greater than 30 days past due on
current tenants and all receivables due from former tenants.

Item 7.     Financial Statements

SHELTER PROPERTIES II

LIST OF FINANCIAL STATEMENTS


      Report of Independent Registered Public Accounting Firm

      Balance Sheet - December 31, 2004

      Statements of Operations - Years ended December 31, 2004 and 2003

      Statements  of Changes in Partners'  Deficit - Years ended  December 31,
      2004 and 2003

      Statements of Cash Flows - Years ended December 31, 2004 and 2003

      Notes to Financial Statements


<PAGE>


           Report of Independent Registered Public Accounting Firm


The Partners
Shelter Properties II


We have audited the  accompanying  balance sheet of Shelter  Properties II as of
December  31,  2004,  and the  related  statements  of  operations,  changes  in
partners' deficit,  and cash flows for each of the two years in the period ended
December 31, 2004.  These  financial  statements are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  We were not engaged to perform an
audit of the Partnership's internal control over financial reporting.  Our audit
included  consideration of internal control over financial  reporting as a basis
for designing audit  procedures that are appropriate in the  circumstances,  but
not for the  purpose  of  expressing  an  opinion  on the  effectiveness  of the
Partnership's internal control over financial reporting. Accordingly, we express
no such opinion.  An audit also includes  examining,  on a test basis,  evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Shelter  Properties  II at
December 31, 2004, and the results of its operations and its cash flows for each
of the two years in the period  ended  December  31, 2004,  in  conformity  with
accounting principles generally accepted in the United States.


                                                          /s/ERNST & YOUNG LLP


Greenville, South Carolina
March 21, 2005



<PAGE>




                              SHELTER PROPERTIES II

                                  BALANCE SHEET
                        (in thousands, except unit data)

                                December 31, 2004

<TABLE>
<CAPTION>


Assets
<S>                                                                           <C>
   Cash and cash equivalents                                                  $ 94
   Receivables and deposits                                                      282
   Restricted escrows                                                            258
   Other assets                                                                  564
   Investment properties (Notes B & F):
      Land                                                    $ 1,630
      Buildings and related personal property                   28,122
                                                                29,752
      Less accumulated depreciation                            (18,022)       11,730
                                                                            $ 12,928

Liabilities and Partners' Deficit
Liabilities
      Accounts payable                                                        $ 96
      Tenant security deposit liabilities                                        119
      Accrued property taxes                                                     248
      Due to affiliates (Note E)                                                 653
      Other liabilities                                                          602
      Mortgage notes payable (Note B)                                         14,987

Partners' Deficit
   General partners                                            $ (87)
   Limited partners (27,500 units issued and
      outstanding)                                              (3,690)       (3,777)
                                                                            $ 12,928

              See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>


                              SHELTER PROPERTIES II

                            STATEMENTS OF OPERATIONS
                      (in thousands, except per unit data)
<TABLE>
<CAPTION>

                                                            Years Ended December 31,
                                                               2004            2003
Revenues:
<S>                                                          <C>             <C>
  Rental income                                              $ 4,623         $ 5,306
  Other income                                                   622             647
  Casualty gain (Note G)                                          95             527
      Total revenues                                           5,340           6,480

Expenses:
  Operating                                                    2,928           2,358
  General and administrative                                     188             215
  Depreciation                                                 1,081           1,078
  Interest                                                     1,132           1,249
  Property taxes                                                 419             403
      Total expenses                                           5,748           5,303

(Loss) income from continuing operations                        (408)          1,177
Loss from discontinued operations (Note A)                        --            (823)
Gain on sale of discontinued operations (Note D)                  20           3,279

Net (loss) income (Note C)                                    $ (388)        $ 3,633

Net (loss) income allocated to general partners (1%)           $ (4)           $ 36
Net (loss) income allocated to limited partners (99%)           (384)          3,597
                                                              $ (388)        $ 3,633
Per limited partnership unit:
  (Loss) income from continuing operations                   $(14.69)        $ 42.36
  Loss from discontinued operations                               --          (29.60)
  Gain on sale of discontinued operations                       0.73          118.04

Net (loss) income                                            $(13.96)        $130.80

              See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>


                              SHELTER PROPERTIES II

                   STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
                        (in thousands, except unit data)
<TABLE>
<CAPTION>

                                         Limited
                                       Partnership    General     Limited
                                          Units       Partners   Partners      Total

<S>                                       <C>           <C>       <C>         <C>
Original capital contributions            27,500        $ 2       $27,500     $27,502

Partners' deficit at
  December 31, 2002                       27,500       $ (119)    $(6,903)    $(7,022)

Net income for the year ended
  December 31, 2003                           --           36       3,597       3,633

Partners' deficit at
  December 31, 2003                       27,500          (83)     (3,306)     (3,389)

Net loss for the year ended
  December 31, 2004                           --           (4)       (384)       (388)

Partners' deficit at
  December 31, 2004                       27,500       $ (87)     $(3,690)    $(3,777)

              See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>



                              SHELTER PROPERTIES II

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                   Years Ended December 31,
                                                                      2004          2003
Cash flows from operating activities:
<S>                                                                  <C>          <C>
  Net (loss) income                                                  $ (388)      $ 3,633
  Adjustments to reconcile net (loss) income to net cash
   provided by operating activities:
     Depreciation                                                      1,081        1,261
     Amortization of loan costs                                           23           28
     Casualty loss                                                        43           --
     Loss on early extinguishment of debt                                 --          812
     Gain on sale of discontinued operations                             (20)      (3,279)
     Casualty gain                                                       (95)        (527)
     Change in accounts:
      Receivables and deposits                                          (160)         925
      Other assets                                                       (34)         (81)
      Accounts payable                                                   (17)        (171)
      Tenant security deposit liabilities                                (24)         (45)
      Accrued property taxes                                               8           51
      Due to affiliate                                                   (49)         (19)
      Other liabilities                                                  210          150
          Net cash provided by operating activities                      578        2,738

Cash flows from investing activities:
  Property improvements and replacements                              (1,184)        (490)
  Net deposits to restricted escrows                                      (1)          (2)
  Insurance proceeds received                                            131          527
  Proceeds from sale of discontinued operations                           --        4,546
          Net cash (used in) provided by investing activities         (1,054)       4,581

Cash flows from financing activities:
  Payments on mortgage notes payable                                    (477)        (526)
  Prepayment penalty                                                      --         (738)
  Repayment of mortgage note payable                                      --       (2,833)
  Advances from affiliate                                                510           30
  Repayment of advances from affiliate                                  (844)      (2,232)
          Net cash used in financing activities                         (811)      (6,299)

Net (decrease) increase in cash and cash equivalents                  (1,287)       1,020

Cash and cash equivalents at beginning of year                         1,381          361

Cash and cash equivalents at end of year                              $ 94        $ 1,381
Supplemental disclosure of cash flow information:
  Cash paid for interest                                             $ 1,139      $ 1,439
Supplemental disclosure of non-cash flow information:
  Fixed assets in accounts payable                                    $ 51          $ --

              See Accompanying Notes to Financial Statements
</TABLE>


<PAGE>





                              SHELTER PROPERTIES II

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 2004


Note A - Organization and Summary of Significant Accounting Policies

Organization:  Shelter  Properties II (the  "Partnership" or  "Registrant")  was
organized as a limited partnership under the laws of the State of South Carolina
on October 10, 1980.  The general  partner  responsible  for  management  of the
Partnership's  business  is  Shelter  Realty II  Corporation,  a South  Carolina
corporation (the "Corporate General Partner").  The Corporate General Partner is
a  subsidiary  of Apartment  Investment  and  Management  Company  ("AIMCO"),  a
publicly traded real estate investment trust. The other general Partner is AIMCO
Properties,  L.P., an affiliate of the Corporate  General Partner and AIMCO. The
Partnership  Agreement provides that the Partnership is to terminate on December
31,  2020  unless  terminated  prior to such  date.  The  Partnership  commenced
operations  on March  1,  1981,  and  completed  its  acquisition  of  apartment
properties on June 30, 1981. The Partnership  operates two apartment  properties
located in the South and Southeast.

Use of Estimates:  The  preparation of financial  statements in conformity  with
accounting   principles   generally  accepted  in  the  United  States  requires
management to make estimates and assumptions that affect the amounts reported in
the financial  statements and  accompanying  notes.  Actual results could differ
from those estimates.

Allocation of Cash  Distributions:  Cash  distributions  by the  Partnership are
allocated between general and limited partners in accordance with the provisions
of the Partnership  Agreement.  The Partnership Agreement provides that net cash
from operations  means revenue received less operating  expenses paid,  adjusted
for certain  specified items which primarily  include mortgage payments on debt,
property improvements and replacements not previously reserved,  and the effects
of other  adjustments to reserves  including reserve amounts deemed necessary by
the  Corporate  General  Partner.  In  the  following  notes  to  the  financial
statements,  whenever  "net cash  provided by  operations"  is used,  it has the
aforementioned  meaning.  As required by the  Partnership,  the  following  is a
reconciliation   of  "Net  cash  provided  by  operating   activities"   in  the
accompanying statement of cash flow to "Net cash from operations", as defined in
the Partnership  Agreement.  However,  "net cash from operations"  should not be
considered  an  alternative  to net income as an indicator of the  Partnership's
operating performance or to cash flows as a measure of liquidity.
<TABLE>
<CAPTION>

                                                         Years Ended December 31,
                                                             2004          2003
                                                              (in thousands)
<S>                                                         <C>          <C>
Net cash provided by operating activities                   $ 578        $ 2,738
  Property improvements and replacements                    (1,184)         (490)
  Payments on mortgage notes payable                          (477)         (526)
  Advances from affiliates for operations                      510            30
  Repayments to affiliates on advances for operations         (844)       (2,232)
  Changes in reserves for net operating liabilities             66          (810)
  Changes in restricted escrows, net                            (1)           (2)
      Net cash used in operations                          $(1,352)      $(1,292)
</TABLE>

The Partnership  Agreement  provides that 99% of  distributions of net cash from
operations  are  allocated to the limited  partners  until they receive net cash
from  operations  for such  fiscal  year equal to 7% of their  adjusted  capital
values (as  defined in the  Partnership  Agreement),  at which point the general
partners will be allocated all net cash from operations until they have received
distributions equal to 10% of the aggregate net cash from operations distributed
to partners  for such fiscal  year.  Thereafter,  the general  partners  will be
allocated 10% of any  distributions  of remaining net cash from  operations  for
such fiscal year.

All  distributions of distributable  net proceeds (as defined in the Partnership
Agreement) from property  dispositions and refinancings will be allocated to the
limited  partners  until each limited  partner has received an amount equal to a
cumulative 7% per annum of the average of the limited partners' adjusted capital
value,   less  any  prior   distributions   of  net  cash  from  operations  and
distributable net proceeds, and has also received an amount equal to the limited
partners' adjusted capital value. Thereafter, the general partners receive 1% of
the selling prices of properties sold where they acted as a broker, and then the
limited  partners  will  be  allocated  85% of any  remaining  distributions  of
distributable net proceeds and the general partners will receive 15%.

Allocation  of Profits,  Gains and  Losses:  Profits,  gains,  and losses of the
Partnership  are allocated  between  general and limited  partners in accordance
with the provisions of the Partnership Agreement.

Profits, not including gain from property dispositions, are allocated as if they
were distributions of net cash from operations.

Any gain from property  dispositions  attributable to the excess, if any, of the
indebtedness relating to a property immediately prior to the disposition of such
property  over  the  Partnership's  adjusted  basis  in the  property  shall  be
allocated to each partner  having a negative  capital  account  balance,  to the
extent of such negative  balance.  The balance of any gain shall be treated on a
cumulative basis as if it constituted an equivalent  amount of distributable net
proceeds  and shall be  allocated  to the  general  partners  to the extent that
general  partners would have received  distributable  net proceeds in connection
therewith; the balance shall be allocated to the limited partners.  However, the
interest  of the general  partners  will be equal to at least 1% of each gain at
all times during the existence of the Partnership.

All  losses,  including  losses  attributable  to  property  dispositions,   are
allocated  99%  to  the  limited  partners  and  1%  to  the  general  partners.
Accordingly,  net (loss) income as shown in the  statements  of  operations  and
changes in partners'  deficit for 2004 and 2003 was allocated 99% to the limited
partners  and  1% to  the  general  partners.  Net  (loss)  income  per  limited
partnership  unit for 2004 and 2003 was  computed  as 99% of net  (loss)  income
divided by 27,500 average units outstanding.

Fair Value of Financial Instruments: Statement of Financial Accounting Standards
("SFAS") No. 107,  "Disclosures about Fair Value of Financial  Instruments",  as
amended by SFAS No. 119, "Disclosures about Derivative Financial Instruments and
Fair  Value  of  Financial  Instruments",  requires  disclosure  of  fair  value
information  about  financial  instruments,  whether  or not  recognized  in the
balance sheet, for which it is practicable to estimate fair value. Fair value is
defined in the SFAS as the amount at which the instruments could be exchanged in
a  current  transaction  between  willing  parties,  other  than in a forced  or
liquidation  sale.  The  Partnership  believes  that the carrying  amount of its
financial  instruments (except for long term debt) approximates their fair value
due to the short term maturity of these instruments.  The Partnership  estimates
the fair value of its long-term  debt by  discounting  future cash flows using a
discount rate commensurate  with that currently  believed to be available to the
Partnership for similar term, fully amortizing long-term-debt. The fair value of
the Partnership's long-term debt at the Partnership's incremental borrowing rate
approximates its carrying value.

Other Reserves:  The general  partners may designate a portion of cash generated
from operations as "other  reserves" in determining net cash used in operations.
Per the Partnership Agreement, the general partners designated as other reserves
an  amount  equal  to the  net  liabilities  related  to the  operations  of the
apartment properties during the current fiscal year that are expected to require
the use of cash during the next fiscal year. The change in other reserves was an
increase  of  approximately  $66,000 in 2004 and a decrease of $810,000 in 2003.
These  amounts  were  determined  by  considering  changes  in the  balances  of
receivables  and  deposits,  other assets,  accounts  payable,  tenant  security
deposits, accrued taxes, due to affiliates, and other liabilities. At this time,
the Corporate General Partner expects to continue to adjust other reserves based
on the net change in the aforementioned account balances.

Cash and cash equivalents: Cash and cash equivalents include cash on hand and in
banks.  At certain times,  the amount of cash deposited at a bank may exceed the
limit on  insured  deposits.  Cash  balances  include  approximately  $69,000 at
December 31, 2004 that are  maintained by the affiliated  management  company on
behalf of affiliated entities in cash concentration accounts.

Restricted escrows: At December 31, 2004,  approximately $232,000 was on deposit
with the mortgage holder of Signal Pointe Apartments until the property achieves
certain  occupancy  levels.   During  2003,  the  final  insurance  proceeds  of
approximately  $527,000  were  released  by  the  mortgage  holder  of  Parktown
Townhouses.

Depreciation:  Depreciation  is  provided by the  straight-line  method over the
estimated lives of the apartment  properties and related personal property.  For
Federal income tax purposes,  the  accelerated  cost recovery method is used for
real property over 19 years for additions  after May 8, 1985, and before January
1, 1987. As a result of the Tax Reform Act of 1986, for additions after December
31, 1986, the modified accelerated cost recovery method is used for depreciation
of (1) real  property  additions  over 27 1/2  years and (2)  personal  property
additions over 5 years.

Deferred  Costs:  Loan  costs  of  approximately   $475,000,   less  accumulated
amortization of approximately  $94,000,  are included in other assets.  The loan
costs are amortized over the terms of the related loan agreements.  Amortization
expense was  approximately  $23,000 and $28,000 for the years ended December 31,
2004 and 2003,  respectively,  and is included in interest expense and loss from
discontinued  operations.  Amortization  expense is expected to be approximately
$24,000 for each of the years 2005 through 2009.

Leasing   commissions  and  other  direct  costs  incurred  in  connection  with
successful  leasing  efforts are  deferred and  amortized  over the terms of the
related leases. Amortization of these costs is included in operating expenses.

Tenant  Security  Deposits:  The  Partnership  requires  security  deposits from
lessees  for the  duration  of the  lease  and such  deposits  are  included  in
receivables  and  deposits.  Deposits  are  refunded  when the  tenant  vacates,
provided the tenant has not damaged the unit and is current on rental payments.

Leases: The Partnership  generally leases apartment units for twelve-month terms
or less. The Partnership will offer rental concessions during  particularly slow
months or in response to heavy  competition from other similar  complexes in the
area.  Rental  income  attributable  to  leases,  net  of  any  concessions,  is
recognized on a straight-line  basis over the term of the lease. The Partnership
evaluates all accounts  receivable  from residents and establishes an allowance,
after the application of security  deposits,  for accounts  greater than 30 days
past due on current tenants and all receivables due from former tenants.

Investment Properties:  Investment properties consist of two apartment complexes
and are  stated  at cost.  Acquisition  fees are  capitalized  as a cost of real
estate.  The  Partnership  capitalizes  all  expenditures in excess of $250 that
clearly relate to the acquisition and installation of real and personal property
components.  These  expenditures  include  costs  incurred  to replace  existing
property components, costs incurred to add a material new feature to a property,
and costs that  increase  the useful  life or  service  potential  of a property
component.  These  capitalized costs are depreciated over the useful life of the
asset.  Expenditures for ordinary  repairs,  maintenance and apartment  turnover
costs are expensed as incurred.

In accordance  with SFAS No. 144,  "Accounting for the Impairment or Disposal of
Long-Lived  Assets",  the Partnership  records  impairment  losses on long-lived
assets used in operations when events and circumstances indicate that the assets
might be impaired and the  undiscounted  cash flows estimated to be generated by
those assets are less than the carrying amounts of those assets.  No adjustments
for  impairment of value were recorded in the years ended  December 31, 2004 and
2003.

Segment Reporting:  SFAS No. 131, Disclosure about Segments of an Enterprise and
Related  Information  established  standards  for the way that  public  business
enterprises  report  information  about operating  segments in annual  financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports.  It also establishes  standards
for related disclosures about products and services, geographic areas, and major
customers.  As defined in SFAS No. 131, the  Partnership has only one reportable
segment.

Advertising:  The  Partnership  expenses the costs of  advertising  as incurred.
Advertising  expense,  included in operating expenses and loss from discontinued
operations, was approximately $157,000 and $144,000 for the years ended December
31, 2004 and 2003, respectively.

Basis of  Presentation:  In  accordance  with  SFAS No.  144,  the  accompanying
statement  of  operations  as of  January 1, 2003  reflects  the  operations  of
Raintree  Apartments  as loss from  discontinued  operations  due to its sale in
December 2003.

Note B - Mortgage Notes Payable

The principal terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>

                                Principal        Monthly
                                Balance At       Payment       Stated
                               December 31,     Including     Interest     Maturity
                                   2004          Interest       Rate         Date
                                     (in thousands)
Properties
Parktown Townhouses
<S>                              <C>               <C>         <C>         <C>   <C>
  1st mortgage                   $ 7,010           $ 61        7.21%       01/01/21
Signal Pointe Apartments
  1st mortgage                     7,977              70       7.22%       01/01/21

           Total                 $14,987          $ 131
</TABLE>

The mortgage notes payable are fixed rate mortgages that are nonrecourse and are
secured  by  pledge  of the  respective  apartment  properties  and by pledge of
revenues  from the  respective  rental  properties.  The mortgage  notes payable
include  a  prepayment  penalty  if  repaid  prior  to  maturity.  Further,  the
properties  may not be sold  subject to  existing  indebtedness.  The  principal
balance  is  being  amortized  over  240  months  and is  scheduled  to be fully
amortized at maturity.

Scheduled  principal  payments  of the  mortgage  notes  payable  subsequent  to
December 31, 2004 are as follows (in thousands):

                               2005              $ 513
                               2006                 551
                               2007                 592
                               2008                 636
                               2009                 684
                            Thereafter           12,011
                                                $14,987

Note C - Income Taxes

The Partnership has received a ruling from the Internal  Revenue Service that it
will  be  classified  as  a  partnership   for  Federal   income  tax  purposes.
Accordingly,  no provision for income taxes is made in the financial  statements
of the Partnership. Taxable income or loss of the Partnership is reported in the
income tax returns of its partners.

The  following is a  reconciliation  of reported  net (loss)  income and Federal
taxable income (dollar amounts in thousands, except per unit data):

                                                     2004         2003

Net (loss) income as reported                      $  (388)     $ 3,633
Add (deduct):
   Depreciation differences                            351          460
   Change in prepaid rental                            (46)          49
   Casualty                                            (53)          --
   Other                                               (55)          19

Federal taxable (loss) income                      $  (191)     $ 4,161

Federal taxable (loss) income per limited
   partnership unit                                $ (6.89)     $140.69

The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net liabilities (in thousands):

                  Net liabilities as reported              $(3,777)
                     Buildings and land                        539
                     Accumulated depreciation               (4,550)
                     Syndication fees                        3,111
                     Other                                     541
                  Net liabilities - tax basis              $(4,136)

Note D - Disposition of Investment Property

In December 2003, the Partnership sold Raintree Apartments to a third party, for
a gross sale price of $4,680,000.  The net proceeds  realized by the Partnership
were  approximately  $4,546,000  after payment of closing costs. The Partnership
realized  a gain of  approximately  $3,279,000  as a result of the sale which is
shown as gain on sale of discontinued  operations.  In addition, the Partnership
recorded a loss on early  extinguishment of debt of approximately  $812,000 as a
result of the  write-off of  unamortized  loan costs and a  prepayment  penalty,
which is included in loss from discontinued operations.  In accordance with SFAS
144, the  accompanying  statement of operations  for the year ended December 31,
2003 reflect the operations of Raintree  Apartments as discontinued  operations.
Included in loss from  discontinued  operations  for the year ended December 31,
2003 is approximately $1,005,000 of revenues generated by the property.

Note E - Transactions with Affiliated Parties

The  Partnership  has no employees and depends on the Corporate  General Partner
and its  affiliates for the management  and  administration  of all  Partnership
activities.  The Partnership  Agreement  provides for (i) payments to affiliates
for services and (ii)  reimbursement of certain expenses  incurred by affiliates
on behalf of the Partnership.

Affiliates of the Corporate  General  Partner  receive 5% of gross receipts from
all of the  Partnership's  properties as  compensation  for  providing  property
management  services.  The  Partnership  paid to such  affiliates  approximately
$266,000  and  $324,000  for  the  years  ended  December  31,  2004  and  2003,
respectively, which is included in operating expenses and loss from discontinued
operations.

Affiliates   of  the  Corporate   General   Partner   charged  the   Partnership
reimbursement of accountable  administrative expenses amounting to approximately
$217,000  and  $151,000  for  the  years  ended  December  31,  2004  and  2003,
respectively,  which is  included  in general and  administrative  expenses  and
investment  properties.   The  portion  of  these  reimbursements   included  in
investment  properties  for the years ended  December 31, 2004 and 2003 are fees
related to  construction  management  services  provided by an  affiliate of the
Corporate General Partner of approximately $72,000 and $1,000, respectively. The
construction  management  service fees are  calculated  based on a percentage of
additions to the investment  properties.  At December 31, 2004, the  Partnership
owed  approximately  $35,000 for  accountable  administrative  expenses which is
included in due to affiliates.

In accordance with the Partnership Agreement,  the Corporate General Partner has
loaned the Partnership funds primarily to assist in the  redevelopment  required
at Parktown  Townhouses  due to flood damage as well as the operations of all of
the Partnership's investment properties. During the year ended December 31, 2004
and 2003  the  Partnership  received  advances  of  approximately  $510,000  and
$30,000, respectively, and made principal payments of approximately $844,000 and
$2,232,000,  respectively.  As of  December  31,  2004 the  indebtedness  to the
Corporate General Partner is approximately $513,000, including accrued interest,
which is  included  in due to  affiliates  on the  accompanying  balance  sheet.
Interest  is  charged at the prime rate plus 2% (7.25% at  December  31,  2004).
Interest expense for these loans was  approximately  $11,000 and $91,000 for the
years ended December 31, 2004 and 2003, respectively. Subsequent to December 31,
2004,  the Corporate  General  Partner  advanced  approximately  $308,000 to the
Partnership  to pay real estate  taxes at  Parktowne  Townhouses  and  hurricane
related costs at Signal Pointe Apartments.

During  1983,  a payable to the general  partners of  approximately  $58,000 was
accrued  for sales  commissions  earned.  In  addition,  during  the year  ended
December  31,  2003,  the  Partnership  accrued  a sales  commission  due to the
Corporate  General  Partner  of  approximately  $47,000  related  to the sale of
Raintree Apartments.  Pursuant to the Partnership  Agreement,  these liabilities
cannot be paid  until  certain  levels of return  are  received  by the  limited
partners.  As of December 31, 2004, the level of return to the limited  partners
has not been met. As of December 31, 2004,  these  obligations  were included in
due to affiliates on the accompanying balance sheet.

The  Partnership  insures its properties up to certain  limits through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance  policies  obtained  by  AIMCO  from  insurers  unaffiliated  with the
Corporate  General  Partner.  During the years ended December 31, 2004 and 2003,
the  Partnership was charged by AIMCO and its affiliates  approximately  $70,000
and $85,000,  respectively,  for  insurance  coverage and fees  associated  with
policy claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 21,126 limited  partnership  units
(the "Units") in the Partnership representing 76.82% of the outstanding Units at
December  31,  2004.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Corporate General Partner.  As a result of its ownership of 76.82% of
the outstanding Units, AIMCO and its affiliates are in a position to control all
such voting  decisions with respect to the  Partnership.  Although the Corporate
General  Partner  owes  fiduciary   duties  to  the  limited   partners  of  the
Partnership,  the Corporate  General Partner also owes fiduciary duties to AIMCO
as its sole  stockholder.  As a  result,  the  duties of the  Corporate  General
Partner,  as  corporate  general  partner,  to the  Partnership  and its limited
partners may come into conflict with the duties of the Corporate General Partner
to AIMCO as its sole stockholder.

Note F - Investment Properties and Accumulated Depreciation

                                                    Initial Cost
                                                   To Partnership
                                                   (in thousands)
<TABLE>
<CAPTION>

                                                           Buildings      Net Costs
                                                          and Related    Capitalized
                                                            Personal    Subsequent to
Description                    Encumbrances       Land      Property     Acquisition
                              (in thousands)                            (in thousands)

<S>                              <C>            <C>         <C>            <C>
Parktown Townhouses              $ 7,010        $ 1,095     $ 5,329        $ 9,270
Signal Pointe Apartments           7,977            535       8,062          5,461

          Totals                 $14,987        $ 1,630     $13,391        $14,731
</TABLE>

                     Gross Amount At Which
                            Carried
                      At December 31, 2004
                         (in thousands)
<TABLE>
<CAPTION>

                            Buildings
                               And
                             Related
                             Personal          Accumulated    Date of      Date   Depreciable
Description          Land   Properties Total  Depreciation  Construction Acquired Life-Years
                                             (in thousands)
<S>                <C>       <C>       <C>       <C>           <C>      <C>   <C>   <C>
Parktown           $ 1,095   $14,599   $15,694   $ 7,752       1969     03/01/81    5-35
Townhouses
Signal Pointe
  Apartments           535    13,523    14,058    10,270       1970     06/30/81    5-37

      Totals       $ 1,630   $28,122   $29,752   $18,022
</TABLE>

Reconciliation of "real estate and accumulated depreciation":

                                               Years Ended December 31,
                                                   2004         2003
                                                    (in thousands)
Investment Properties
Balance at beginning of year                      $28,729      $33,074
  Property improvements                             1,235          490
  Disposals of property                              (212)      (4,835)
Balance at end of year                            $29,752      $28,729

Accumulated Depreciation
Balance at beginning of year                      $17,074      $19,528
  Additions charged to expense                      1,081        1,261
  Disposals of property                              (133)      (3,715)
Balance at end of year                            $18,022      $17,074

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2004 and 2003,  is  approximately  $30,291,000  and  $29,444,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 2004 and 2003, is  approximately  $22,572,000  and  $21,842,000,
respectively.

Note G - Casualty Events

During June 2001,  Parktown  Townhouses incurred extensive damage as a result of
severe flooding which affected  certain areas of Texas. The  reconstruction  and
mold remediation of the property took place during 2002 and 2001 and all repairs
were  substantially  complete at the end of 2002.  As a result,  in 2002 the net
assets were  written off and the  Partnership  recorded a casualty  gain for the
insurance  proceeds received in excess of the net assets written off. During the
year ended  December  31, 2003,  additional  insurance  proceeds  related to the
reconstruction of approximately  $527,000 were received and were recognized as a
casualty gain. In addition,  approximately $582,000 was received related to lost
rents, of which approximately $378,000 was recorded during 2003 as rental income
in the accompanying financial statements.

During  August  and  September  2004,  one  of  the   Partnership's   investment
properties, Signal Pointe Apartments,  incurred damages from Hurricanes Charlie,
Frances and Jeanne.  The property  incurred  damages from  Hurricane  Charlie of
approximately $196,000. During the year ended December 31, 2004, the Partnership
received  insurance  proceeds of  approximately  $131,000  and wrote off damaged
assets of approximately  $36,000 related to Hurricane Charlie.  This resulted in
the  recognition  of a casualty  gain of  approximately  $95,000.  The  property
incurred damages from Hurricanes  Frances and Jeanne of approximately  $245,000,
which were not covered by insurance proceeds. During the year ended December 31,
2004, the Partnership  recognized a casualty loss of approximately  $43,000 as a
result of the write-off of undepreciated damaged assets. The loss is included in
operating expenses on the accompanying statement of operations. In addition, the
Partnership  incurred  clean up costs  from the three  storms  of  approximately
$312,000, which were not covered by insurance proceeds. These costs are included
in operating  expense on the accompanying  statement of operations.  At December
31, 2004, approximately $290,000 is accrued for these clean up costs.

Note H - Contingencies

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its Corporate  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of interests  in certain  Corporate  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition,  during the third quarter of 2001, a complaint  captioned Heller v.
Insignia  Financial  Group (the  "Heller  action")  was filed  against  the same
defendants  that are named in the  Nuanes  action.  On or about  August 6, 2001,
plaintiffs filed a first amended  complaint.  The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a court  appointed
appraiser. An affiliate of the Corporate General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Corporate   General  Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector") filed an appeal (the "Appeal") seeking to vacate and/or reverse the
order approving the settlement and entering  judgment  thereto.  On November 24,
2003,  the Objector  filed an  application  requesting  the court order AIMCO to
withdraw settlement tender offers it had commenced,  refrain from making further
offers  pending  the appeal and auction  any units  tendered  to third  parties,
contending  that the offers did not  conform  with the terms of the  settlement.
Counsel  for the  Objector  (on behalf of another  investor)  had  alternatively
requested the court take certain action  purportedly to enforce the terms of the
settlement agreement. On December 18, 2003, the court heard oral argument on the
motions  and denied them both in their  entirety.  The  Objector  filed a second
appeal challenging the court's use of a referee and its order requiring Objector
to pay those fees.

On January 28, 2004,  the  Objector  filed his opening  brief in the Appeal.  On
April 23,  2004,  the  Corporate  General  Partner  and its  affiliates  filed a
response  brief in support  of the  settlement  and the  judgment  thereto.  The
plaintiffs  have also  filed a brief in support  of the  settlement.  On June 4,
2004,  Objector filed a reply to the briefs  submitted by the Corporate  General
Partner and  Plaintiffs.  In addition  both the  Objector and  plaintiffs  filed
briefs in connection  with the second  appeal.  On March 21, 2005,  the Court of
Appeals issued opinions in both pending  appeals.  With regard to the settlement
and judgment  entered  thereto,  the Court of Appeals  vacated the trial court's
order and remanded to the trial court for further findings on the basis that the
"state of the record is insufficient  to permit  meaningful  appellate  review".
With  regard to the  second  appeal,  the Court of  Appeals  reversed  the order
requiring the Objector to pay referee fees.

The  Corporate  General  Partner  does  not  anticipate  that  any  costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.

As previously disclosed,  AIMCO Properties L.P. and NHP Management Company, both
affiliates of the Corporate General Partner,  are defendants in an action in the
United States District Court,  District of Columbia.  The plaintiffs have styled
their  complaint  as a  collective  action  under the Fair Labor  Standards  Act
("FLSA") and seek to certify state subclasses in California,  Maryland,  and the
District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties
L.P. failed to compensate  maintenance  workers for time that they were required
to be "on-call". Additionally, plaintiffs allege AIMCO Properties L.P. failed to
comply  with the FLSA in  compensating  maintenance  workers  for time that they
worked in responding to a call while  "on-call".  The  defendants  have filed an
answer to the amended complaint denying the substantive  allegations.  Discovery
relating  to the  certification  of the  collective  action  has  concluded  and
briefing in the matter is underway.  Although the outcome of any  litigation  is
uncertain,  AIMCO  Properties,  L.P. does not believe that the ultimate  outcome
will have a material  adverse  effect on its  financial  condition or results of
operations.  Similarly,  the Corporate General Partner does not believe that the
ultimate  outcome  will have a  material  adverse  effect  on the  Partnership's
financial condition or results of operations.

The  Partnership  is unaware  of any other  pending  or  outstanding  litigation
matters  involving  it or its  investment  properties  that are not of a routine
nature arising in the ordinary course of business.

Environmental

Various  Federal,  state and local laws subject  property owners or operators to
liability for management,  and the costs of removal or  remediation,  of certain
hazardous  substances  present on a property.  Such laws often impose  liability
without regard to whether the owner or operator knew of, or was responsible for,
the release or presence of the  hazardous  substances.  The  presence of, or the
failure to manage or remedy properly,  hazardous substances may adversely affect
occupancy at affected  apartment  communities and the ability to sell or finance
affected properties.  In addition to the costs associated with investigation and
remediation  actions brought by government  agencies,  the presence of hazardous
substances  on a  property  could  result in claims by  private  plaintiffs  for
personal injury,  disease,  disability or other  infirmities.  Various laws also
impose  liability for the cost of removal,  remediation or disposal of hazardous
substances  through a  licensed  disposal  or  treatment  facility.  Anyone  who
arranges for the disposal or treatment of hazardous  substances  is  potentially
liable  under such laws.  These laws often impose  liability  whether or not the
person arranging for the disposal ever owned or operated the disposal  facility.
In  connection  with  the  ownership  and  operation  of  its  properties,   the
Partnership could  potentially be liable for environmental  liabilities or costs
associated with its properties.

Mold

The Partnership is aware of lawsuits  against owners and managers of multifamily
properties asserting claims of personal injury and property damage caused by the
presence of mold, some of which have resulted in substantial  monetary judgments
or settlements. The Partnership has only limited insurance coverage for property
damage loss claims  arising from the  presence of mold and for  personal  injury
claims related to mold  exposure.  Affiliates of the Corporate  General  Partner
have  implemented a national  policy and procedures to prevent or eliminate mold
from its  properties  and the  Corporate  General  Partner  believes  that these
measures will eliminate,  or at least minimize, the effects that mold could have
on residents.  To date, the  Partnership  has not incurred any material costs or
liabilities  relating to claims of mold  exposure  or to abate mold  conditions.
Because the law regarding  mold is unsettled and subject to change the Corporate
General  Partner  can make no  assurance  that  liabilities  resulting  from the
presence of or exposure to mold will not have a material  adverse  effect on the
Partnership's financial condition or results of operations.

SEC Investigation

As  previously  disclosed,  the  Central  Regional  Office of the United  States
Securities  and  Exchange   Commission   (the  "SEC")  is  conducting  a  formal
investigation relating to certain matters.  Although the staff of the SEC is not
limited  in the  areas  that it may  investigate,  AIMCO  believes  the areas of
investigation include AIMCO's miscalculated monthly net rental income figures in
third quarter 2003,  forecasted  guidance,  accounts payable,  rent concessions,
vendor  rebates,  capitalization  of payroll and certain  other  costs,  and tax
credit  transactions.  AIMCO is cooperating  fully. AIMCO is not able to predict
when the matter  will be  resolved.  AIMCO does not  believe  that the  ultimate
outcome  will  have a  material  adverse  effect on its  consolidated  financial
condition or results of operations.  Similarly,  the Corporate  General  Partner
does not believe that the ultimate  outcome will have a material  adverse effect
on the Partnership's financial condition or results of operations.


<PAGE>



Item 8.     Changes in and  Disagreements  with  Accountants on Accounting and
            Financial Disclosure

            None.

Item 8a.    Controls and Procedures

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the Corporate  General Partner,  who are the equivalent of the  Partnership's
principal executive officer and principal financial officer,  respectively,  has
evaluated  the  effectiveness  of  the  Partnership's  disclosure  controls  and
procedures (as such term is defined in Rules  13a-15(e) and 15d-15(e)  under the
Securities  Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report.  Based on such  evaluation,  the principal
executive  officer and  principal  financial  officer of the  Corporate  General
Partner, who are the equivalent of the Partnership's principal executive officer
and principal  financial officer,  respectively,  have concluded that, as of the
end of such period,  the  Partnership's  disclosure  controls and procedures are
effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fourth quarter of 2004 that have materially  affected,  or are reasonably likely
to  materially  affect,  the  Partnership's   internal  control  over  financial
reporting.

Item 8b.    Other Information

            None.

                                    PART III

Item 9.     Directors,  Officers,  Promoters and Control  Persons,  Compliance
            with Section 16(a) of the Exchange Act

Shelter  Properties II (the  "Partnership" or "Registrant")  has no directors or
officers.  The names and ages of, as well as the  positions and offices held by,
the  directors and officers of Shelter  Realty II  Corporation  (the  "Corporate
General Partner") are set forth below. There are no family relationships between
or among any directors or officers.

Name                        Age    Position

Martha L. Long               45    Director and Senior Vice President
Harry G. Alcock              42    Director and Executive Vice President
Miles Cortez                 61    Executive Vice President, General Counsel
                                     and Secretary
Patti K. Fielding            41    Executive Vice President
Paul J. McAuliffe            48    Executive Vice President and Chief
                                     Financial Officer
Thomas M. Herzog             42    Senior Vice President and Chief Accounting
                                     Officer
Stephen B. Waters            43    Vice President

Martha L. Long has been a Director and Senior Vice  President of the Corporate
General  Partner  since  February  2004.  Ms.  Long has been with AIMCO  since
October  1998 and has served in  various  capacities.  From 1998 to 2001,  Ms.
Long  served  as  Senior  Vice  President  and  Controller  of  AIMCO  and the
Corporate  General  Partner.  During 2002 and 2003,  Ms. Long served as Senior
Vice President of Continuous Improvement for AIMCO.

Harry G. Alcock was appointed as a Director of the Corporate  General Partner in
October 2004 and was appointed Executive Vice President of the Corporate General
Partner  in  February  2004 and has been  Executive  Vice  President  and  Chief
Investment Officer of AIMCO since October 1999. Prior to October 1999 Mr. Alcock
served as a Vice President of AIMCO from July 1996 to October 1997,  when he was
promoted to Senior Vice  President-Acquisitions  where he served  until  October
1999. Mr. Alcock has had responsibility for acquisition and financing activities
of AIMCO since July 1994.

Miles  Cortez was  appointed  Executive  Vice  President,  General  Counsel  and
Secretary  of the  Corporate  General  Partner in February  2004 and of AIMCO in
August 2001. Prior to joining AIMCO, Mr. Cortez was the senior partner of Cortez
Macaulay Bernhardt & Schuetze LLC, a Denver law firm, from December 1997 through
September 2001.

Patti K. Fielding was appointed  Executive  Vice President - Securities and Debt
of the General  Partner in  February  2004 and of AIMCO in  February  2003.  Ms.
Fielding was  appointed  Treasurer  of AIMCO in January  2005.  Ms.  Fielding is
responsible  for  debt  financing  and the  treasury  department.  Ms.  Fielding
previously  served as Senior Vice  President - Securities and Debt of AIMCO from
January 2000 to February 2003. Ms.  Fielding  joined AIMCO in February 1997 as a
Vice President.

Paul J. McAuliffe has been Executive Vice President and Chief Financial  Officer
of the Corporate  General Partner since April 2002. Mr.  McAuliffe has served as
Executive Vice  President of AIMCO since  February 1999 and was appointed  Chief
Financial Officer of AIMCO in October 1999. From May 1996 until he joined AIMCO,
Mr. McAuliffe was Senior Managing Director of Secured Capital Corp.

Thomas M.  Herzog was  appointed  Senior  Vice  President  and Chief  Accounting
Officer  of the  Corporate  General  Partner  in  February  2004 and of AIMCO in
January 2004.  Prior to joining AIMCO in January 2004, Mr. Herzog was at GE Real
Estate,  serving as Chief Accounting Officer & Global Controller from April 2002
to January  2004 and as Chief  Technical  Advisor from March 2000 to April 2002.
Prior to joining GE Real  Estate,  Mr.  Herzog was at Deloitte & Touche LLP from
1990 until 2000.

Stephen B. Waters was appointed Vice President of the Corporate  General Partner
in April  2004.  Mr.  Waters  previously  served as a  Director  of Real  Estate
Accounting   since   joining   AIMCO  in   September   1999.   Mr.   Waters  has
responsibilities for real estate and partnership accounting with AIMCO.

One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited  partnerships which
either have a class of  securities  registered  pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section  15(d) of such Act.  Further,  one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general  partner  of  AIMCO  Properties,  L.P.,  entities  that  have a class of
securities  registered  pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting  requirements of Section 15 (d) of such
Act.

The board of directors of the Corporate General Partner does not have a separate
audit  committee.  As such,  the board of  directors  of the  Corporate  General
Partner fulfills the functions of an audit committee. The board of directors has
determined  that  Martha L. Long meets the  requirement  of an "audit  committee
financial expert".

The directors and officers of the Corporate  General Partner with authority over
the Partnership are all employees of subsidiaries of AIMCO.  AIMCO has adopted a
code of ethics that applies to such  directors  and  officers  that is posted on
AIMCO's  website  (www.AIMCO.com).   AIMCO's  website  is  not  incorporated  by
reference to this filing.

Item 10.    Executive Compensation

No  directors  and  officers  of the  Corporate  General  Partner  received  any
remuneration from the Registrant.

Item 11.    Security Ownership of Certain Beneficial Owners and Management

Except as noted below,  no person was known to be the  beneficial  owner of more
than 5% of the Limited  Partnership  Units of the Partnership as of December 31,
2004.

           Entity                          Number of Units      Percentage

           Cooper River Properties, LLC        1,958.5             7.12%
             (an affiliate of AIMCO)
           AIMCO IPLP, L.P.                    9,128.0            33.19%
             (an affiliate of AIMCO)
           AIMCO Properties, LP                10,039.5           36.51%
             (an affiliate of AIMCO)

Cooper River  Properties,  LLC and AIMCO IPLP, L.P. are indirectly  ultimately
owned by AIMCO. Their business address is 55 Beattie Place, Greenville,  South
Carolina 29602.

AIMCO  Properties,  L.P. is indirectly  ultimately  controlled  by AIMCO.  Its
business address is 4582 S. Ulster St. Parkway,  Suite 1100, Denver,  Colorado
80237.

No director or officer of the  Corporate  General  Partner  owns any units.  The
Corporate  General  Partner  owns 100  Units  as  required  by the  terms of the
Partnership  Agreement.  AIMCO  Properties,  LP, the other general partner,  has
acquired 10,039.5 units as the result of one or more tender offers.

Item 12.    Certain Relationships and Related Transactions

The  Partnership  has no employees and depends on the Corporate  General Partner
and its  affiliates for the management  and  administration  of all  Partnership
activities.  The Partnership  Agreement  provides for (i) payments to affiliates
for services and (ii)  reimbursement of certain expenses  incurred by affiliates
on behalf of the Partnership.

Affiliates of the Corporate  General  Partner  receive 5% of gross receipts from
all of the  Partnership's  properties as  compensation  for  providing  property
management  services.  The  Partnership  paid to such  affiliates  approximately
$266,000  and  $324,000  for  the  years  ended  December  31,  2004  and  2003,
respectively, which is included in operating expenses and loss from discontinued
operations.

Affiliates   of  the  Corporate   General   Partner   charged  the   Partnership
reimbursement of accountable  administrative expenses amounting to approximately
$217,000  and  $151,000  for  the  years  ended  December  31,  2004  and  2003,
respectively,  which is  included  in general and  administrative  expenses  and
investment  properties.   The  portion  of  these  reimbursements   included  in
investment  properties  for the years ended  December 31, 2004 and 2003 are fees
related to  construction  management  services  provided by an  affiliate of the
Corporate General Partner of approximately $72,000 and $1,000, respectively. The
construction  management  service fees are  calculated  based on a percentage of
additions to the investment  properties.  At December 31, 2004, the  Partnership
owed  approximately  $35,000 for  accountable  administrative  expenses which is
included in due to affiliates.

In accordance with the Partnership Agreement,  the Corporate General Partner has
loaned the Partnership funds primarily to assist in the  redevelopment  required
at Parktown  Townhouses  due to flood damage as well as the operations of all of
the Partnership's investment properties. During the year ended December 31, 2004
and 2003  the  Partnership  received  advances  of  approximately  $510,000  and
$30,000, respectively, and made principal payments of approximately $844,000 and
$2,232,000,  respectively.  As of  December  31,  2004 the  indebtedness  to the
Corporate General Partner is approximately $513,000, including accrued interest,
which is  included  in due to  affiliates  on the  accompanying  balance  sheet.
Interest  is  charged at the prime rate plus 2% (7.25% at  December  31,  2004).
Interest expense for these loans was  approximately  $11,000 and $91,000 for the
years ended December 31, 2004 and 2003, respectively. Subsequent to December 31,
2004,  the Corporate  General  Partner  advanced  approximately  $308,000 to the
Partnership  to pay real estate  taxes at  Parktowne  Townhouses  and  hurricane
related costs at Signal Pointe Apartments.

During  1983,  a payable to the general  partners of  approximately  $58,000 was
accrued  for sales  commissions  earned.  In  addition,  during  the year  ended
December  31,  2003,  the  Partnership  accrued  a sales  commission  due to the
Corporate  General  Partner  of  approximately  $47,000  related  to the sale of
Raintree Apartments.  Pursuant to the Partnership  Agreement,  these liabilities
cannot be paid  until  certain  levels of return  are  received  by the  limited
partners.  As of December 31, 2004, the level of return to the limited  partners
has not been met. As of December 31, 2004,  these  obligations  were included in
due to affiliates on the accompanying balance sheet.

The  Partnership  insures its properties up to certain  limits through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance  policies  obtained  by  AIMCO  from  insurers  unaffiliated  with the
Corporate  General  Partner.  During the years ended December 31, 2004 and 2003,
the  Partnership was charged by AIMCO and its affiliates  approximately  $70,000
and $85,000,  respectively,  for  insurance  coverage and fees  associated  with
policy claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 21,126 limited  partnership  units
(the "Units") in the Partnership representing 76.82% of the outstanding Units at
December  31,  2004.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Corporate General Partner.  As a result of its ownership of 76.82% of
the outstanding Units, AIMCO and its affiliates are in a position to control all
such voting  decisions with respect to the  Partnership.  Although the Corporate
General  Partner  owes  fiduciary   duties  to  the  limited   partners  of  the
Partnership,  the Corporate  General Partner also owes fiduciary duties to AIMCO
as its sole  stockholder.  As a  result,  the  duties of the  Corporate  General
Partner,  as  corporate  general  partner,  to the  Partnership  and its limited
partners may come into conflict with the duties of the Corporate General Partner
to AIMCO as its sole stockholder.

Item 13.    Exhibits

            See Exhibit Index attached.

Item 14.    Principal Accountant Fees and Services

The Corporate  General Partner has reappointed  Ernst & Young LLP as independent
auditors to audit the financial  statements  of the  Partnership  for 2005.  The
aggregate  fees billed for  services  rendered by Ernst & Young LLP for 2004 and
2003 are described below.

Audit Fees. Fees for audit services  totaled  approximately  $36,000 and $46,000
for 2004 and 2003,  respectively.  Fees for audit services also include fees for
the reviews of the Partnership's Quarterly Reports on Form 10-QSB.

Tax Fees. Fees for tax services  totaled  approximately  $10,000 and $16,000 for
2004 and 2003, respectively.

<PAGE>




                                   SIGNATURES


In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                    SHELTER PROPERTIES II LIMITED PARTNERSHIP


                                    By:   Shelter Realty II Corporation
                                          Corporate General Partner


                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President


                                          /s/Stephen B. Waters
                                    By:   Stephen B. Waters
                                          Vice President


                                    Date: March 31, 2005


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
date indicated.


/s/Harry G. Alcock            Director and Executive        Date: March 31, 2005
Harry G. Alcock               Vice President


/s/Martha L. Long             Director and Senior Vice      Date: March 31, 2005
Martha L. Long                President


/s/Stephen B. Waters          Vice President                Date: March 31, 2005
Stephen B. Waters



<PAGE>



                                  EXHIBIT INDEX


Exhibit

  2.1             Agreement and Plan of Merger,  dated as of October 1, 1998, by
                  and  between  AIMCO  and IPT,  incorporated  by  reference  to
                  Exhibit 2.1 filed with Registrant's Current Report on Form 8-K
                  dated October 1, 1998.

  3               See Exhibit 4(a)

  4               (a)   Amended and  Restated  Certificate  and  Agreement  of
                        Limited  Partnership  [included  as  Exhibit  A to the
                        Prospectus  of  Registrant   dated  February  2,  1981
                        contained   in   Amendment   No.  1  to   Registration
                        Statement No. 2-69507 of Registrant  filed February 2,
                        1981 (the  "Prospectus")  and  incorporated  herein by
                        reference].

                  (b)   Subscription  Agreements and Signature Pages [Filed with
                        Amendment No. 1 of  Registration  Statement No. 2-69507,
                        of Registrant and incorporated herein by reference].

 10(i)            Contracts   related  to   acquisition   or   disposition  of
                        properties.

                  (a)   Purchase  Agreement  dated  December 31,  1980,  between
                        Hubris,  Inc. and U.S.  Shelter  Corporation to purchase
                        Parktown Townhouse.*

                  (d)   First  Amendment to Purchase and Sale  Contract  between
                        Registrant and Sealy  Management  Company,  Inc.,  dated
                        November  24,  2003,  filed as an exhibit to the Current
                        Report on Form 8-K dated December 30, 2003.

                  (e)   Second  Amendment to Purchase and Sale Contract  between
                        Registrant and Sealy  Management  Company,  Inc.,  dated
                        November  24,  2003,  filed as an exhibit to the Current
                        Report on Form 8-K dated December 30, 2003.

                  (f)   Assignment  and Assumption of Purchase and Sale Contract
                        between Sealy Management Company,  Inc. and RT Anderson,
                        LLC, dated December 29, 2003, filed as an exhibit to the
                        Current Report on Form 8-K dated December 30, 2003.

                  *Filed as Exhibit 12(a) to Amendment  No. 1 of  Registration
                  Statement No.  2-69507 of Registrant  filed February 2, 1981
                  and incorporated herein by reference.

   (iii) Contracts related to refinancing of debt:

                  (g)   Multifamily Note dated December 15, 2000, by and between
                        Registrant and Reilly Mortgage Group, Inc., for Parktown
                        Townhouses Apartments.**

                  (i)   Multifamily Note dated December 15, 2000, by and between
                        Registrant and Reilly Mortgage  Group,  Inc., for Signal
                        Pointe Apartments.**

                  **Filed as Exhibit 10(iii) (g) and (i), respectively,  to Form
                  10-KSB of Registrant  for the year ended December 31, 2002 and
                  incorporated herein by reference.

31.1              Certification  of  equivalent  of  Chief  Executive  Officer
                  pursuant     to     Securities     Exchange     Act    Rules
                  13a-14(a)/15d-14(a),  as Adopted  Pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002.

31.2              Certification  of  equivalent  of  Chief  Financial  Officer
                  pursuant     to     Securities     Exchange     Act    Rules
                  13a-14(a)/15d-14(a),  as Adopted  Pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002.

32.1              Certification   Pursuant  to  18  U.S.C.  Section  1350,  as
                  Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley  Act
                  of 2002.




<PAGE>




Exhibit 31.1


                                  CERTIFICATION


I, Martha L. Long, certify that:


1.    I have reviewed this annual report on Form 10-KSB of Shelter Properties II
      Limited Partnership;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.

Date:  March 31, 2005

                                    /s/Martha L. Long
                                    Martha L. Long
                                    Senior Vice  President of Shelter  Realty II
                                    Corporation,   equivalent   of   the   chief
                                    executive officer of the Partnership


<PAGE>



Exhibit 31.2


                                  CERTIFICATION


I, Stephen B. Waters, certify that:


1.    I have reviewed this annual report on Form 10-KSB of Shelter Properties II
      Limited Partnership;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.

Date:  March 31, 2005

                                    /s/Stephen B. Waters
                                    Stephen B. Waters
                                    Vice President of Shelter Realty
                                    II Corporation, equivalent of the
                                    chief financial officer of the
                                    Partnership


<PAGE>


Exhibit 32.1


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                Section 906 of the Sarbanes-Oxley Act of 2002



In  connection  with the Annual  Report on Form 10-KSB of Shelter  Properties II
Limited Partnership (the "Partnership"), for the year ended December 31, 2004 as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  Martha L. Long, as the equivalent of the Chief Executive  Officer of
the Partnership, and Stephen B. Waters, as the equivalent of the Chief Financial
Officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:


      (1)   The Report fully complies with the  requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                           /s/Martha L. Long
                                    Name:  Martha L. Long
                                    Date:  March 31, 2005


                                           /s/Stephen B. Waters
                                    Name:  Stephen B. Waters
                                    Date:  March 31, 2005


This  certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.