19 July 2016 Buying an apartment: what you need to consider If you have been looking to get into the property market, then buying an apartment could be a great choice to get your foot on the ladder, and can be really well suited to first time buyers. For many first time buyers, apartments can offer the appeal of low maintenance living and can make a great place to call home. Given they often have cheaper price tags when compared to houses, first time buyers will generally find servicing the loan repayments on an apartment easier than an established house, especially for single applicants. The same principles still apply when buying an apartment as when looking to purchase other types of properties such as location, access to local amenities and market values – so you need to do your research. Proximity to amenities is important They are particularly popular when located near transportation or places of employment and have become very popular within our inner-city cosmopolitan suburbs. Renovating older apartments can add immediate value Personally, I would always consider older apartments as these properties tend to be larger and ready to update which will often add immediate value. Some of these improvements can be quite easy and inexpensive such as a new lick of paint, new floor coverings or a basic refresh of the kitchen and/or bathroom. This is subject to any Body Corporate or Strata considerations. Areas with an abundance of apartments means more competition when selling It is also a good idea to look for an apartment in areas where there is not an over representation of apartments as this will only mean greater competition when you come to sell. Property features can make the apartment more appealing As a Buyer’s Advocate, I always look for properties where there is an element of exclusivity – aspects that differentiate it from others or which provide some unique aspect of value. These can include the amount of available open space, gardens, views, sunlight and exposure, resident and visitor car parking, security, extra storage plus the overall condition and appeal of the property as a whole. The property title should be checked up front The type of ownership is important when considering an apartment to purchase. For apartments, it is often Strata Title Ownership. This is essentially where you own the property like you would do with a house but need to follow rules, regulations and by-laws around the complex for any changes to the property. Ownership types to avoid can include company share type structures (very old apartments can use this structure) or managed schemes which are typical in resort style developments. Understand what impact a body corporate will have on your property ownership It is also important that first time apartment buyers understand what a body corporate is and how they operate as they often impact your ownership experience. A body corporate is a legal entity of the owners group within an apartment block. They exist for the purpose of managing things like public area maintenance, capital improvements to the broader property (not the internals of apartments) and public liability insurances associated with common areas, plus the expenses like water and electricity for these areas. In more modern developments, the types of expenses can be greater with swimming pools, landscaping, lifts and security amongst others, and the costs can be significant, which are on top of your mortgage. My top questions to ask before buying an apartment: What are the strata fees? What is the ratio of owner occupiers to renters? How many apartments are in the block? Is the street full of apartments and how exclusive is the block? What is the scope for renovation? Can we modernise or take advantage of the views/outlook through open spaces such as balconies? Can I obtain council permission to renovate/change floor plans? What is access and security like? How easy is access to the apartment?