================================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                    FORM 8-K


                                 CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: January 5, 1999

                      APPLE RESIDENTIAL INCOME TRUST, INC.
             (Exact name of registrant as specified in its charter)

         VIRGINIA                      0-23983                  54-1816010
         --------                      -------                  ----------
        (State of                    (Commission              (IRS Employer
       incorporation)               File Number)             Identification No.)

         306 EAST MAIN STREET
         RICHMOND, VIRGINIA                                    23219
         ------------------                                    -----
         (Address of principal                              (Zip Code)
          executive offices)



               Registrant's telephone number, including area code:
                                 (804) 643-1761


================================================================================
<PAGE>

                      APPLE RESIDENTIAL INCOME TRUST, INC.

                                    FORM 8-K

                                      Index
                                                                           Page
                                                                          Number
                                                                          ------

Item 2.  Acquisition or Disposition of Assets                                  3

Item 5.  Other Events                                                          6

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits

            a.    Independent Auditors' Report                                 8
                  (Sierra Ridge Apartments)*

                  Historical Statement of Income and
                  Direct Operating Expenses
                  (Sierra Ridge Apartments)*

                  Note to Historical Statement of
                  Income and Direct Operating
                  Expenses (Sierra Ridge Apartments)*

             b.   Pro Forma Statement of Operations                            9
                  for the Year ended December 31, 1997
                  (unaudited)*

                  Pro Forma Statement of Operations
                  for the Nine Months ended September 30, 1998
                  (unaudited)*

                  Pro Forma Balance Sheet as of
                  September 30, 1998 (unaudited)*

             c.   Exhibits

                  10.1     Purchase Contract for Sierra Ridge Apartments

                  10.2     Property Management Agreement for
                           Sierra Ridge Apartments

                  10.3     Property Acquisition/Disposition
                           Agreement dated January 1, 1999

                  23.1     Consent of Independent Auditors*


-----------------------
* To be filed by amendment.


                                       2
<PAGE>
Item 2.  Acquisition or Disposition of Assets

                             SIERRA RIDGE APARTMENTS
                               San Antonio, Texas

      On January 5, 1999,  Apple REIT  Limited  Partnership  (together  with its
parent companies,  Apple Residential Income Trust, Inc., Apple General, Inc. and
Apple  Limited,  Inc.,  the  "Company")  purchased  the Sierra Ridge  Apartments
located at 1401 Patricia Drive, San Antonio, Texas (the "Property").

      The Property  comprises 230 apartment  units.  The purchase  price for the
Property was  $5,817,000.  The seller was The  Travelers  Indemnity  Company,  a
Connecticut  corporation,  which  is not  affiliated  with  the  Company,  Apple
Residential  Management  Group,  Inc. (the "Advisor") or their  affiliates.  The
purchase  price was paid entirely in cash using proceeds from the sale of Common
Shares of the  Company.  Title to the  Property  was  conveyed to the Company by
limited warranty deed.

      Location.  The Property is located off of Blanco Road in the northern part
of San Antonio, Texas within Bexar County.

      The following  information is based in part upon  information  provided by
the San Antonio Chamber of Commerce.

      San Antonio is located in south  central  Texas,  approximately  140 miles
northwest of the Gulf of Mexico. The San Antonio  Metropolitan  Statistical Area
consists  of  Bexar,  Comal,  Guadalupe  and  Wilson  Counties,  which  comprise
approximately  3,338 square miles of area and have an  aggregate  population  of
approximately 1,145,000 persons.

      The largest  employer in the area is the military,  which has an estimated
annual  economic impact of $4.5 billion.  The second largest  economic factor is
wholesale  and  retail  trade,   particularly   with  Mexico.   San  Antonio  is
approximately  150 miles from the city of Laredo on the Mexican border.  Because
of its  proximity  to Mexico,  more than half of both United  States  exports to
Mexico and Mexican exports to the United States travel through San Antonio.

      Other important economic factors include  agribusiness  (consisting of the
storing,  processing and  distribution  of farm  commodities and items made from
them), travel and tourism,  and health care. San Antonio has recently been rated
in "Conde Nast Magazine" as one of the top ten visitor destinations in the world
and San Antonio has recently become popular as a retirement area.

      San  Antonio  is a major  railroad  center  and is  served  by  Interstate
Highways 10, 35 and 37.


                                       3
<PAGE>
      The institutions of higher education in the area include the University of
Texas at San Antonio, Trinity University,  Our Lade of the Lake University,  and
St. Mary's University.  Cultural and recreational attractions include the Alamo,
the River Walk,  Market Square,  the San Antonio Zoo and Aquarium,  Sea World of
Texas, and Six Flags Fiesta Texas.

      The Property is located near restaurants, businesses, schools and churches
in a neighborhood that includes other multi-family,  residential, commercial and
retail development.  Access to the Property is provided by Loop 410, Highway 281
and  Interstate  Highway  10/  Highway  87.  The  Property  is an  approximately
10-minute drive from the San Antonio International Airport and the north-central
business district, and an approximately 25-minute drive from downtown.

      Description  of the Property.  The Property  consists of 230  garden-style
apartment units in 20 two-story  buildings on approximately  10.2 acres of land.
The Property was constructed in 1981.  There are nine apartment unit types.  The
unit mix and rents being charged new tenants as of January 1999 are as follows:


<TABLE>
<CAPTION>
                                                               Approximate Interior         Monthly
Quantity                              Type                      Square Footage               Rental
--------                              ----                      --------------               -------
  <S>     <C>                                                          <C>               <C>    <C>
  42      One bedroom, one bathroom                                    593                $420 - $430
  54      One bedroom, one bathroom                                    667                 455 -  470
  42      One bedroom, one bathroom w/vaulted ceilings                 667                 465 -  480
  45      Two bedrooms, two bathrooms                                  904                 550 -  565
  19      Two bedrooms, two bathrooms w/ vaulted ceilings              904                 570 -  575
   7      Two bedrooms, two bathrooms                                  901                 555 -  565
   9      Two bedrooms, two bathrooms w/ vaulted ceilings              901                 565 -  580
   8      Two bedrooms, two bathrooms                                  967                 575 -  590
   4      Two bedrooms, two bathrooms w/ vaulted ceilings              967                 585 -  590

</TABLE>

      The apartments provide a total of approximately 173,000 square feet of net
rentable area.

      The Company  believes that the Property has generally been well maintained
and is in good  condition.  However,  the  Company  has  budgeted  approximately
$345,000 for repairs and

                                       4
<PAGE>
improvements  to  the  Property,  to  include  clubhouse  renovations,  exterior
painting, minor foundation repairs and interior upgrades.

      The following information is provided by the seller. Physical occupancy at
the Property  averaged  approximately 95% in 1994, 90% in 1995, 87% in 1996, 92%
in 1997, and 93% in 1998.  Leases at the Property are generally for terms of one
year or less.  Average  rental  rates for the past  five  years  have  generally
increased. As an example, a one-bedroom, one-bathroom apartment unit (667 square
feet) rented for $415 in 1994,  $420 in 1995,  $440 in 1996,  $440 in 1997,  and
$440 in 1998.  The  average  effective  annual  rental  per  square  foot at the
Property  for 1994  through  1998 was $7.16,  $7.24,  $7.59,  $7.59,  and $7.59,
respectively.

      The Property has two outdoor  swimming pools, a hot tub, two tennis courts
and a fitness center.  There is also a clubhouse with a leasing office and ample
paved parking for the tenants.

      The buildings are wood frame  construction with exteriors  consisting of a
combination  of brick  veneer and painted  wood  siding.  The  buildings  are on
concrete  slab  foundations  and roofs are  pitched  and  covered  with  asphalt
shingles on plywood sheathing.

      Each  apartment  unit has  wall-to-wall  carpeting in the living areas and
vinyl floors in the kitchen and bath. Each apartment unit has a cable television
hook-up and an individually  controlled heating and air-conditioning  unit. Each
kitchen has a  refrigerator/freezer,  electric  range and oven,  dishwasher  and
garbage  disposal.  Each  apartment  unit has  vertical  blinds,  ceiling  fans,
washer/dryer  connections,   a  balcony  or  patio,  built-in  bookcases  and  a
wood-burning  fireplace.  The owner of the Property  pays for cold water,  sewer
service,  trash  removal  and gas for hot  water.  The  residents  pay for their
electricity   usage,   which   includes   cooking,    lighting,    heating   and
air-conditioning.

      There  are at  least  nine  apartment  properties  that  compete  with the
Property.  All  offer  similar  amenities  and  generally  have  rents  that are
comparable to those of the Property.  Based on a recent  telephone  survey,  the
Advisor  estimates  that  occupancy  in  nearby  competing  properties  averaged
approximately 95% on December 31, 1998.

      As of December 21, 1998, the Property was approximately 96% occupied.  The
tenants are a mix of white-collar and blue-collar workers,  students and retired
persons.

      For 1998,  the value of the Property for  purposes of  assessment  of real
estate taxes was  $4,805,000  and the tax rate was $2.93017,  resulting in total
real estate taxes for the year of $140,794.62.

      The basis of the  depreciable  residential  real  property  portion of the
Property (currently estimated at about $5,344,471) will be depreciated over 27.5
years on a straight-line  basis. The basis of the personal property portion will
be depreciated in accordance with the modified  accelerated cost recovery system
of the Internal  Revenue Code of 1986,  as amended (the


                                       5
<PAGE>
"Code").  Amounts to be spent by the Company on repairs and improvements will be
treated  for tax  purposes as  permitted  by the Code based on the nature of the
expenditures.

      The Advisor and the Company believe that the Property is and will continue
to be adequately covered by property and liability insurance.

      Material  Factors  Considered  in  Assessing  the  Property.  The  factors
considered  by the Advisor and the  Company to be  relevant  in  evaluating  the
Property for acquisition by the Company included the following:

         1.       The San Antonio area was perceived as being characterized by a
                  diverse,  stable and steadily  growing  economy  owing to such
                  factors as its  importance as part of increased  trade between
                  the United States and Mexico and its increased  attractiveness
                  as a retirement area. It was believed that these factors would
                  support stable  occupancy  rates and  reasonable  increases in
                  rents at the Property.

         2.       The  Property  was  perceived  as being in a desirable  rental
                  submarket of San Antonio with a location  convenient  to major
                  employment   areas  as  well  as  cultural  and   recreational
                  attractions.

         3.       Based upon an engineering report and its own inspections,  the
                  Advisor  believes  that the Property has been well  maintained
                  and is in good condition,  although the Advisor  believes that
                  the planned  repairs and  improvements  for the Property  will
                  allow further increase in rents.

      Acquisition and Management Services and Fees. In consideration of services
rendered to the Company in connection  with the selection and acquisition of the
Property,  the Company paid  Cornerstone  Realty Income  Trust,  Inc. a property
acquisition fee equal to 2% of the purchase price of the Property,  or $116,340.
Cornerstone  Realty Income Trust,  Inc. will also serve as property  manager for
the  Property  and for its  services  will be  paid  by the  Company  a  monthly
management  fee  equal  to 5%  of  the  gross  revenues  of  the  Property  plus
reimbursement of certain expenses.

      The Company is not aware of any material  adverse factors  relating to the
Property not set forth in this report that will cause the financial  information
contained in this report not to be  necessarily  indicative of future  operating
results.


Item 5.  Other Events

      Before   October  1,  1998,   Cornerstone   Realty  Income   Trust,   Inc.
("Cornerstone") provided property management, advisory and real estate brokerage
services to the Company.  The property  management  and advisory  services  were
provided by Cornerstone under  subcontracts  from Apple  Residential  Management
Group, Inc. ("ARMG") and Apple Residential Advisors,  Inc. ("ARA"), the entities
that originally  contracted with the Company for the providing of such services.
As to the real estate brokerage services,  Cornerstone had


                                       6
<PAGE>

previously purchased the assets of Apple Realty Group, Inc. ("ARG") - consisting
principally of the real estate  brokerage  agreement - and thereby  succeeded to
ARG in providing such services to the Company.

      Effective at the close of business on September 30, 1998, the  subcontract
agreement with ARA described above was terminated,  and ARA assigned to ARMG its
rights  and  responsibilities  under the  advisory  agreement.  Thus,  beginning
October 1, 1998,  advisory  services to the Company were performed by ARMG using
employees leased from Cornerstone.  Effective October 1, 1998,  Cornerstone sold
to ARMG its rights in the real estate  brokerage  agreement.  Beginning  on such
date ARMG provided the services and became  entitled to the  compensation  under
the real estate brokerage agreement.  On such date, the Company and ARMG entered
into a  restatement  of the real  estate  brokerage  agreement.  Pursuant  to an
amendment made in the restatement,  the real estate  brokerage  agreement became
terminable by either party on two-weeks' notice.

      Effective at the close of business on December 31, 1998,  ARMG  terminated
its real estate  brokerage  agreement with the Company.  On January 1, 1999, the
Company and Cornerstone entered into a new real estate brokerage agreement.  The
new real estate  brokerage  agreement  has  substantially  the same terms as the
previous  real  estate  brokerage  agreement  under which  Cornerstone  rendered
services to the Company  except that it has a term of five years from January 1,
1999.

      It is not expected that the restructuring of the relationships under which
the Company  receives  property  management,  advisory and real estate brokerage
services will have any material effect on the Company.












                                       7
<PAGE>
                                   ITEM 7.a.*




















--------------
* To be filed by amendment.  It is  impracticable to include herein the required
financial statements for the Property. The required financial statements will be
filed as an amendment  to this report as soon as possible,  but in no event more
than 60 days after the date of filing of this report.




                                       8
<PAGE>
                                  ITEM 7.b.*















--------------
* To be filed by amendment.  It is  impracticable to include herein the required
pro forma financial  information.  The required pro forma financial  information
will be filed as an  amendment  to this  report as soon as  possible,  but in no
event more than 60 days after the date of filing of this report.

                                       9
<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                            Apple Residential Income Trust, Inc.




Date: January 20, 1999                      By:   /s/ Glade M. Knight
                                                  ------------------------------
                                                  Glade M. Knight
                                                  President of Apple Residential
                                                  Income Trust, Inc.
















                                       10
<PAGE>

                                  EXHIBIT INDEX

                      Apple Residential Income Trust, Inc.
                         Form 8-K dated January 5, 1999

Exhibit Number                        Exhibit
--------------                        -------

      10.1              Purchase Contract for Sierra Ridge Apartments

      10.2              Property Management Agreement for Sierra Ridge
                        Apartments

      10.3              Property Acquisition/Disposition Agreement dated January
                        1, 1999

      23.1              Consent of Independent Auditors*














-------------
* To be filed by amendment.





                                       11
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================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: January 5, 1999

                      APPLE RESIDENTIAL INCOME TRUST, INC.
             (Exact name of registrant as specified in its charter)

         VIRGINIA                      0-23983                  54-1816010
         --------                      -------                  ----------
        (State of                    (Commission              (IRS Employer
       incorporation)               File Number)             Identification No.)

         306 EAST MAIN STREET
         RICHMOND, VIRGINIA                                    23219
         ------------------                                    -----
         (Address of principal                              (Zip Code)
          executive offices)

               Registrant's telephone number, including area code:
                                 (804) 643-1761

================================================================================
APPLE RESIDENTIAL INCOME TRUST, INC.

                                    FORM 8-K

                                      Index
                                                                           Page
                                                                          Number
                                                                          ------

Item 2.  Acquisition or Disposition of Assets                                  3

Item 5.  Other Events                                                          6

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits

            a.    Independent Auditors' Report                                 8
                  (Sierra Ridge Apartments)*

                  Historical Statement of Income and
                  Direct Operating Expenses
                  (Sierra Ridge Apartments)*

                  Note to Historical Statement of
                  Income and Direct Operating
                  Expenses (Sierra Ridge Apartments)*

             b.   Pro Forma Statement of Operations                            9
                  for the Year ended December 31, 1997
                  (unaudited)*

                  Pro Forma Statement of Operations
                  for the Nine Months ended September 30, 1998
                  (unaudited)*

                  Pro Forma Balance Sheet as of
                  September 30, 1998 (unaudited)*

             c.   Exhibits

                  10.1     Purchase Contract for Sierra Ridge Apartments

                  10.2     Property Management Agreement for
                           Sierra Ridge Apartments

                  10.3     Property Acquisition/Disposition
                           Agreement dated January 1, 1999

                  23.1     Consent of Independent Auditors*

-----------------------
* To be filed by amendment.

                                       2
Item 2.  Acquisition or Disposition of Assets

                             SIERRA RIDGE APARTMENTS
                               San Antonio, Texas

      On January 5, 1999,  Apple REIT  Limited  Partnership  (together  with its
parent companies,  Apple Residential Income Trust, Inc., Apple General, Inc. and
Apple  Limited,  Inc.,  the  "Company")  purchased  the Sierra Ridge  Apartments
located at 1401 Patricia Drive, San Antonio, Texas (the "Property").

      The Property  comprises 230 apartment  units.  The purchase  price for the
Property was  $5,817,000.  The seller was The  Travelers  Indemnity  Company,  a
Connecticut  corporation,  which  is not  affiliated  with  the  Company,  Apple
Residential  Management  Group,  Inc. (the "Advisor") or their  affiliates.  The
purchase  price was paid entirely in cash using proceeds from the sale of Common
Shares of the  Company.  Title to the  Property  was  conveyed to the Company by
limited warranty deed.

      Location.  The Property is located off of Blanco Road in the northern part
of San Antonio, Texas within Bexar County.

      The following  information is based in part upon  information  provided by
the San Antonio Chamber of Commerce.

      San Antonio is located in south  central  Texas,  approximately  140 miles
northwest of the Gulf of Mexico. The San Antonio  Metropolitan  Statistical Area
consists  of  Bexar,  Comal,  Guadalupe  and  Wilson  Counties,  which  comprise
approximately  3,338 square miles of area and have an  aggregate  population  of
approximately 1,145,000 persons.

      The largest  employer in the area is the military,  which has an estimated
annual  economic impact of $4.5 billion.  The second largest  economic factor is
wholesale  and  retail  trade,   particularly   with  Mexico.   San  Antonio  is
approximately  150 miles from the city of Laredo on the Mexican border.  Because
of its  proximity  to Mexico,  more than half of both United  States  exports to
Mexico and Mexican exports to the United States travel through San Antonio.

      Other important economic factors include  agribusiness  (consisting of the
storing,  processing and  distribution  of farm  commodities and items made from
them), travel and tourism,  and health care. San Antonio has recently been rated
in "Conde Nast Magazine" as one of the top ten visitor destinations in the world
and San Antonio has recently become popular as a retirement area.

      San  Antonio  is a major  railroad  center  and is  served  by  Interstate
Highways 10, 35 and 37.

                                       3
The institutions of higher education in the area include the University of
Texas at San Antonio, Trinity University,  Our Lade of the Lake University,  and
St. Mary's University.  Cultural and recreational attractions include the Alamo,
the River Walk,  Market Square,  the San Antonio Zoo and Aquarium,  Sea World of
Texas, and Six Flags Fiesta Texas.

      The Property is located near restaurants, businesses, schools and churches
in a neighborhood that includes other multi-family,  residential, commercial and
retail development.  Access to the Property is provided by Loop 410, Highway 281
and  Interstate  Highway  10/  Highway  87.  The  Property  is an  approximately
10-minute drive from the San Antonio International Airport and the north-central
business district, and an approximately 25-minute drive from downtown.

      Description  of the Property.  The Property  consists of 230  garden-style
apartment units in 20 two-story  buildings on approximately  10.2 acres of land.
The Property was constructed in 1981.  There are nine apartment unit types.  The
unit mix and rents being charged new tenants as of January 1999 are as follows:
Approximate Interior         Monthly
Quantity                              Type                      Square Footage               Rental
--------                              ----                      --------------               -------
42      One bedroom, one bathroom                                    593                $420 - $430
  54      One bedroom, one bathroom                                    667                 455 -  470
  42      One bedroom, one bathroom w/vaulted ceilings                 667                 465 -  480
  45      Two bedrooms, two bathrooms                                  904                 550 -  565
  19      Two bedrooms, two bathrooms w/ vaulted ceilings              904                 570 -  575
   7      Two bedrooms, two bathrooms                                  901                 555 -  565
   9      Two bedrooms, two bathrooms w/ vaulted ceilings              901                 565 -  580
   8      Two bedrooms, two bathrooms                                  967                 575 -  590
   4      Two bedrooms, two bathrooms w/ vaulted ceilings              967                 585 -  590
The apartments provide a total of approximately 173,000 square feet of net
rentable area.

      The Company  believes that the Property has generally been well maintained
and is in good  condition.  However,  the  Company  has  budgeted  approximately
$345,000 for repairs and

                                       4
improvements  to  the  Property,  to  include  clubhouse  renovations,  exterior
painting, minor foundation repairs and interior upgrades.

      The following information is provided by the seller. Physical occupancy at
the Property  averaged  approximately 95% in 1994, 90% in 1995, 87% in 1996, 92%
in 1997, and 93% in 1998.  Leases at the Property are generally for terms of one
year or less.  Average  rental  rates for the past  five  years  have  generally
increased. As an example, a one-bedroom, one-bathroom apartment unit (667 square
feet) rented for $415 in 1994,  $420 in 1995,  $440 in 1996,  $440 in 1997,  and
$440 in 1998.  The  average  effective  annual  rental  per  square  foot at the
Property  for 1994  through  1998 was $7.16,  $7.24,  $7.59,  $7.59,  and $7.59,
respectively.

      The Property has two outdoor  swimming pools, a hot tub, two tennis courts
and a fitness center.  There is also a clubhouse with a leasing office and ample
paved parking for the tenants.

      The buildings are wood frame  construction with exteriors  consisting of a
combination  of brick  veneer and painted  wood  siding.  The  buildings  are on
concrete  slab  foundations  and roofs are  pitched  and  covered  with  asphalt
shingles on plywood sheathing.

      Each  apartment  unit has  wall-to-wall  carpeting in the living areas and
vinyl floors in the kitchen and bath. Each apartment unit has a cable television
hook-up and an individually  controlled heating and air-conditioning  unit. Each
kitchen has a  refrigerator/freezer,  electric  range and oven,  dishwasher  and
garbage  disposal.  Each  apartment  unit has  vertical  blinds,  ceiling  fans,
washer/dryer  connections,   a  balcony  or  patio,  built-in  bookcases  and  a
wood-burning  fireplace.  The owner of the Property  pays for cold water,  sewer
service,  trash  removal  and gas for hot  water.  The  residents  pay for their
electricity   usage,   which   includes   cooking,    lighting,    heating   and
air-conditioning.

      There  are at  least  nine  apartment  properties  that  compete  with the
Property.  All  offer  similar  amenities  and  generally  have  rents  that are
comparable to those of the Property.  Based on a recent  telephone  survey,  the
Advisor  estimates  that  occupancy  in  nearby  competing  properties  averaged
approximately 95% on December 31, 1998.

      As of December 21, 1998, the Property was approximately 96% occupied.  The
tenants are a mix of white-collar and blue-collar workers,  students and retired
persons.

      For 1998,  the value of the Property for  purposes of  assessment  of real
estate taxes was  $4,805,000  and the tax rate was $2.93017,  resulting in total
real estate taxes for the year of $140,794.62.

      The basis of the  depreciable  residential  real  property  portion of the
Property (currently estimated at about $5,344,471) will be depreciated over 27.5
years on a straight-line  basis. The basis of the personal property portion will
be depreciated in accordance with the modified  accelerated cost recovery system
of the Internal  Revenue Code of 1986,  as amended (the

                                       5
"Code").  Amounts to be spent by the Company on repairs and improvements will be
treated  for tax  purposes as  permitted  by the Code based on the nature of the
expenditures.

      The Advisor and the Company believe that the Property is and will continue
to be adequately covered by property and liability insurance.

      Material  Factors  Considered  in  Assessing  the  Property.  The  factors
considered  by the Advisor and the  Company to be  relevant  in  evaluating  the
Property for acquisition by the Company included the following:

         1.       The San Antonio area was perceived as being characterized by a
                  diverse,  stable and steadily  growing  economy  owing to such
                  factors as its  importance as part of increased  trade between
                  the United States and Mexico and its increased  attractiveness
                  as a retirement area. It was believed that these factors would
                  support stable  occupancy  rates and  reasonable  increases in
                  rents at the Property.

         2.       The  Property  was  perceived  as being in a desirable  rental
                  submarket of San Antonio with a location  convenient  to major
                  employment   areas  as  well  as  cultural  and   recreational
                  attractions.

         3.       Based upon an engineering report and its own inspections,  the
                  Advisor  believes  that the Property has been well  maintained
                  and is in good condition,  although the Advisor  believes that
                  the planned  repairs and  improvements  for the Property  will
                  allow further increase in rents.

      Acquisition and Management Services and Fees. In consideration of services
rendered to the Company in connection  with the selection and acquisition of the
Property,  the Company paid  Cornerstone  Realty Income  Trust,  Inc. a property
acquisition fee equal to 2% of the purchase price of the Property,  or $116,340.
Cornerstone  Realty Income Trust,  Inc. will also serve as property  manager for
the  Property  and for its  services  will be  paid  by the  Company  a  monthly
management  fee  equal  to 5%  of  the  gross  revenues  of  the  Property  plus
reimbursement of certain expenses.

      The Company is not aware of any material  adverse factors  relating to the
Property not set forth in this report that will cause the financial  information
contained in this report not to be  necessarily  indicative of future  operating
results.

Item 5.  Other Events

      Before   October  1,  1998,   Cornerstone   Realty  Income   Trust,   Inc.
("Cornerstone") provided property management, advisory and real estate brokerage
services to the Company.  The property  management  and advisory  services  were
provided by Cornerstone under  subcontracts  from Apple  Residential  Management
Group, Inc. ("ARMG") and Apple Residential Advisors,  Inc. ("ARA"), the entities
that originally  contracted with the Company for the providing of such services.
As to the real estate brokerage services,  Cornerstone had

                                       6
previously purchased the assets of Apple Realty Group, Inc. ("ARG") - consisting
principally of the real estate  brokerage  agreement - and thereby  succeeded to
ARG in providing such services to the Company.

      Effective at the close of business on September 30, 1998, the  subcontract
agreement with ARA described above was terminated,  and ARA assigned to ARMG its
rights  and  responsibilities  under the  advisory  agreement.  Thus,  beginning
October 1, 1998,  advisory  services to the Company were performed by ARMG using
employees leased from Cornerstone.  Effective October 1, 1998,  Cornerstone sold
to ARMG its rights in the real estate  brokerage  agreement.  Beginning  on such
date ARMG provided the services and became  entitled to the  compensation  under
the real estate brokerage agreement.  On such date, the Company and ARMG entered
into a  restatement  of the real  estate  brokerage  agreement.  Pursuant  to an
amendment made in the restatement,  the real estate  brokerage  agreement became
terminable by either party on two-weeks' notice.

      Effective at the close of business on December 31, 1998,  ARMG  terminated
its real estate  brokerage  agreement with the Company.  On January 1, 1999, the
Company and Cornerstone entered into a new real estate brokerage agreement.  The
new real estate  brokerage  agreement  has  substantially  the same terms as the
previous  real  estate  brokerage  agreement  under which  Cornerstone  rendered
services to the Company  except that it has a term of five years from January 1,
1999.

      It is not expected that the restructuring of the relationships under which
the Company  receives  property  management,  advisory and real estate brokerage
services will have any material effect on the Company.

                                       7
ITEM 7.a.*

--------------
* To be filed by amendment.  It is  impracticable to include herein the required
financial statements for the Property. The required financial statements will be
filed as an amendment  to this report as soon as possible,  but in no event more
than 60 days after the date of filing of this report.

                                       8
ITEM 7.b.*

--------------
* To be filed by amendment.  It is  impracticable to include herein the required
pro forma financial  information.  The required pro forma financial  information
will be filed as an  amendment  to this  report as soon as  possible,  but in no
event more than 60 days after the date of filing of this report.

                                       9
SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                            Apple Residential Income Trust, Inc.

Date: January 20, 1999                      By:   /s/ Glade M. Knight
                                                  ------------------------------
                                                  Glade M. Knight
                                                  President of Apple Residential
                                                  Income Trust, Inc.

                                       10
EXHIBIT INDEX

                      Apple Residential Income Trust, Inc.
                         Form 8-K dated January 5, 1999

Exhibit Number                        Exhibit
--------------                        -------

      10.1              Purchase Contract for Sierra Ridge Apartments

      10.2              Property Management Agreement for Sierra Ridge
                        Apartments

      10.3              Property Acquisition/Disposition Agreement dated January
                        1, 1999

      23.1              Consent of Independent Auditors*

-------------
* To be filed by amendment.

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