The sun., 1918-08-18

power, water, fuel, gas, carriage, now
ers, supplies. repairs, painting. inciden-
tails. Insurance, taxes and agents COM
mission. We keep a separate heading for
physical improvements, which expense
10 added to the original value Of the
building. When the monthly expense or
each OF these items Is plotted on a sheet
over a period of year. II enables us TO
tell Just where every cent has been
spent and shows graphically II any d.
vision Of the operating expense Is larger
than II should be.
The total cost of operating In rels-
ton to the total income varies a great
deal according to the size OF the build
ing. the size Of the apartments and the
number OF apartments. For very high
class service It 10 much more expensive
per dollar income TO operate n small
building with say elk or eight apart
ments than to operate a larger one OF
ten or twelve apartments. The quality
of service has TO be the same In both
buildings, and an Increase In the number
OF apartments does not make a proper
tionatc increase in the cost Of operation.
We and that the cost OF operation will
vary from 80 to 40 per cent. Of the total
income
This type OF, apartment Is undoubt-
eddy one Of the very best kinds Of invest
ment. The location will he such that the
value Of the land will increase year by
year. The. fact that the apartment has
Sesn built on q certain lot viii increase
the vstss Of surrounding property and
thus benedt ttseif.
the best materials throughout and I'm
,shed In the most thorough and ND to
date manner will depreciate In value
much less rapidly than n cheaper build
Ing, especially small apartments OF non
fireproof construction. The depreciation
in ordinary apartment buildings results
In the highest rentals being obtainable
only when the building Is neN. As the
buildings deoreciate In value the rentals
decrease. In buildings OF the type under
discussion we have found that the con-
trary In true. One particular building
built twelve years ago has been able to
increase its annual rental 1900 for each
APARTMENT Further. the total operating
expense stays the same year after year.
This Is not true OF the cheaper apart
ments, where the cost OF repairs and up
keer increases with the age Of the build
ing.
Consequently No feel that we are
correct In asserting that such an invest
nent Is one of the safest and most per-
nfanent The building, being absolutely
hreproof. will be structurally sound nifty
or even one hundred years After Its erec-
ton.
Tho plan. IL II is a real solution of
the living problem, will result in an
apartment always In demand. The
changing tenants keep their apartments
up to the very last thing in interior
decoration and equipment Thus our
buildings are continually kept as good
as new and their earning power, instead
or decreasing. will Increase
The operating expense can be re-
duced considerably during the four
summer, months because practically all
the tenants are out of town and some
OF the employees can be dismissed We
endeavor to close the building as nearly
as possible during this period.
There Is no Definite way to estab-
iish the proper rent to charge for an
apartment 1t OF course depends upon
the law OF supply and demand. Most
apartments Of this type rent for ap-
proxirhately 20 cents to 81 per square
foot OF floor area. We have always
established our rates and believe It ad-
visaole with our type Of tenant on a
basis whereby the tenant pays for every
Kind or decoration They all spend
many thousands OF dollars In this way
which otherwise would not be done
This goes to increase the value Of the
building and the renting value of each
apartment
1t IL because Of such considerations
as these that we believe the highest
type OF large apartment building Is n
peculiarly good investment. They should
net an average return of 10 per cent OF
more II properly built and operated"