Tips for apart­ment in­vest­ing

The Weekend Post - Real Estate - - Front Page -

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.

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