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Buying an Apartment? Some Things You Need to Know
If you’re looking for your first investment property or are keen to buy your first home, apartments can be a great place to start. Apartment living can be an affordable entry into the property market, but it’s important to know what to look out for and what to avoid. Here are our top tips.
Location, Location, Location
One advantage of buying an apartment is you’re likely to be able to afford a property in a more desirable area. Buying in a central location will be a huge drawcard for tenants. Look for apartments that offer easy public transport options or are within walking distance to shops and the central business district. Investing in a home with a view never hurt, either – but balance views, purchase price and likely rental levels. The top floor of the building will have the best views, but it will cost more – and the rental may not increase in quite the same proportions.
Check Out the Facilities
Apartments often come with great shared facilities that are also likely to appeal to tenants. Look out for pools, gyms and attractive common spaces. Remember though that increased amenity in the form of pools and gyms will be reflected in the costs in the body corporate budget. Do your sums on the investment return!
Understand Your Responsibilities
Fantastic shared facilities such as those mentioned above come at a cost. Before you buy, ensure you understand your responsibilities as the owner of a unit-titled property. You’ll automatically become a member of the body corporate and will pay annual fees to the body corporate, which looks after the management and maintenance of the property. Find out more here.
Do Your Homework
It’s a good idea to ask your real estate agent for a copy of the building's long-term maintenance plan, and at least two year’s worth of body corporate meeting minutes. These will give you an understanding of the management of the complex you are about to buy into, and the kinds of issues that are being discussed at the AGM. Once you’ve seen the long term maintenance plan, check what money there is – if any – in the long term maintenance fund. Find out what your annual body corporate fees will be and whether any major maintenance works or upgrades to the building are planned. The only money a body corporate has is the levies it raises from owners – so if large capital works are planned that aren’t funded in the long term plan, you and your fellow owners will be paying for those.
Ask For the Disclosure Statement
Legally, the seller has to provide you with a Disclosure Statement under s146 of the Unit Titles Act, detailing the role and responsibilities of the body corporate, the property’s financial status and the buyer’s rights and responsibilities. Make sure you and your legal adviser get a copy, and read it.
Consider Your Neighbours
Living at close quarters is different from living in a stand alone home. Check out the vibe of the building by visiting the apartment block at various times of day and night. Unlike living in the suburbs, traffic and outside noise are likely to be higher – but that’s because it’s all happening so much closer to home! Get a sense of the complex, and be ready to be a little closer to your fellow Kiwis than in the ‘burbs.
Do Your Due Diligence
As with buying any property, it’s important to do your due diligence. Obtain a Land Information Memorandum (“LIM report”) form the Council, get a professional to check the structural soundness of the building, have your lawyer review the title, and check what auxiliary units (known as ‘AUs’)are and are not on the title. Your bank may well require an independent valuation, and if you’re buying as an investment, ask your friendly Crockers property manager for an independent rental appraisal.
Look at the Details
Don’t forget to ask about parking arrangements and waste disposal systems – these may seem like small details, but they will quickly become a big deal if there’s nowhere to park or the rubbish disposal system is inefficient or laborious.
We’re Here to Help!
The Crockers Realty team are well versed in the complexities of buying and selling unit-titled properties and are here to answer all your questions. Put your mind at ease and contact one of the team at firstname.lastname@example.org.