Tips for apartment investing
AS apartment numbers in some areas skyrocket across the country, buyers might have a smorgasbord of choice and far less competition when it comes to buying up.
With this in mind, now could be the perfect time to consider investing in an apartment.
Here are some of the most common questions I am asked, and my recommendations. Should I purchase off-theplan, newly built or an established apartment? This alone is one of the most important factors when looking at an investment and there are a variety of pros and cons associated with each.
There’s no right or wrong when it comes to newer versus older properties – it all depends on the property in question, and price. One of the main advantages of buying off-theplan is that might be able to pay today’s price at a later date and take ownership of the property when it’s worth a higher value.
The downside of purchasing off-the-plan is that if the market price decreases significantly during the building process, you could end up paying more than the property is worth.
My advice is to consult an independent valuer to assess the price being charged and then do some independent research to get an idea of where the market is heading.
Before signing any off-theplan contracts, also check for clauses to ensure the size and design of your apartment will not be significantly altered in any way during the building process.
Newly built apartments are exactly that, new, and they are very attractive to prospective renters and they will usually sell at a higher price in comparison to an older apartment that hasn’t been updated.
But, don’t discount older buildings, they are usually larger in size and tend to be more affordable in price, giving you more for your money. How should I compare different apartments? When starting your apartment search, be sure to keep track of the properties you have viewed. Seeing 10 open houses a day can be overwhelming and confusing when you’re looking back at the details a few weeks later – construct a simple spreadsheet and compare what the agents were quoting to what it finally sold for. To ensure you get the best deal possible, it’s a good idea compare ongoing apartment costs over time – body corporate, strata fees, etc.
You should also get an independent valuation of any property you purchase to ensure that you are paying a fair price. What hidden costs should I look out for? When purchasing an apartment, be wary of fancy amenities such as a lift, a gym, swimming pool or 24-hour concierge. While an attractive draw card for potential tenants, these amenities can incur expensive strata fees.
It’s integral that you know ‘the whole story’ about a property before you purchase to help prevent unexpected costs popping up down the track.
Before purchasing any apartment, you could purchase the strata report for the building to confirm the strata fees you’ll have to pay each month and inform you of building insurance records and activity over the past few years.