Apartment living can be great... if you find the right apartment to buy.
Buying an apartment can be a great option when it comes to buying a home to live in or as part of your investment property portfolio. Finding the right apartment and knowing what to look out for is essential to ensure you make a good purchase.
When considering buying an apartment, make sure to consider ALL of the costs associated with apartment ownership; this will include more than just the initial purchase price. You’ll also need to consider Owners Corporation fee’s, special levies for building works etc.
Here’s a checklist I’ve prepared, to guide you through purchasing an apartment.
1. Finding the right apartment
There have been a lot of apartments built over the last 10 years so when looking for an apartment to buy, there will be a fair few options.
Some of the main things to consider of the apartment itself are the layout, the quality of finishes and sizes of the bedrooms and living areas. Facilities will also vary from building to building so if you’re after gyms, pools or anything else, make sure they’re all functional and up to your requirements.
When you inspect an apartment, keep an eye out for any structural issues. Things like mould, cracks, warped floorboards are all signs of problems within the apartment – some may be easy to repair while others could become quite costly. Make sure you have the property professionally inspected if you suspect any issues with the apartment.
It’s really important to imagine yourself living in the space that you’re looking at and being honest about whether it suits your requirements. Make sure the bedrooms are big enough for you. Is there enough room to store your clothes? If you want a TV in your bedroom, is there enough room for one? Is there a power supply?
If you enjoy entertaining at home, make sure the living area will fit your furniture and allow for entertaining and the lifestyle you want. Is there enough room for a sofa and dining table? Will your current furniture fit or will you need to buy new furniture?
Location is also very important. Pick a property that suits your location and is close to your lifestyle demands. Café’s, supermarkets, public transport etc. If these are important items, then make sure the location ticks all of your boxes.
2. What are the Owners Corporation/Strata/Body Corporate fees?
When you buy an apartment, there is usually a company engaged to manage the common area’s of the building. If your apartment complex has pools, lifts, gardens or shared bins – then someone has to organise and coordinate the maintenance and repairs of these shared facilities. The role of the Strata company (also known as an Owners Corporation or Body Corporate company) is to collect funds from all of the owners to maintain the property and all of its facilities. This also includes insurances and major works such as replacing windows or guttering etc.
Depending on the size of the building, how many owners and the facilities the building offers, will usually determine the cost of the Owners Corporation levies or fee’s.
Before you buy an apartment, it’s important to know what the ongoing Owners Corporation fee’s are going to be and factor this into your budget. Depending onthe building, this could be as low as a couple of hundred dollars or as high as tens of thousands of dollars per year.
It’s also important to look at the minutes from the most recent Owners Corporation, Annual General Meeting. This will detail any major works or capital improvements that are being proposed. If there are major works planned, then you will be liable to pay your share and this could be in the thousands of dollars depending on the works.
3. What are the Owners Corporation rules?
Managing properties around Melboune, we’ve had to deal with many different Owners Corporations. Some good, some terrible, some laid back and some extremely strict. Each Owners Corporation company will have set rules for the building and a method on enforcing those rules.
The rules will cover everything from use of communal areas (including pool and gym operating hours etc) through to policies on pets. Make sure you get a copy of the Owners Corporation rules before buying any apartment to make sure you can live within the rules.
Breaking the rules could result in fines and issues with neighbours - neither of which are great options.
4. Car parking
If you’re purchasing an apartment with a car space, make sure you inspect the position of your car space. Many apartments today are being sold with Car Stacker parking spaces and this can come with height, length and weight restrictions.
If your apartment comes with multiple parking spaces, you’ll want to ensure that all parking spaces are easily accessible.
5. Internal and additional storage
Storage is an issue which even people with large houses struggle with. When considering buying an apartment, make sure you assess the storage situation. If there’s not enough storage provided, consider if there are other storage solutions which you can buy or if there is a storage cage available to you which belongs to the apartment.
Storage cages can be great for keeping luggage or items you don’t use often.
Make sure the storage cage is lockable and easily accessible.
6. Who are the neighbours?
The people who live around your apartment will have a big influence on your enjoyment of your home.
It may seem like a waste of time but I recommend ‘hanging out’ in front of the building for a while to see who’s coming in and out. Considering you’ll be spending a lot of time with these people, seeing the demographic and type of people in the building will give you a rough idea of what living there will be like.
If you’re an older couple looking to downsize to an apartment and notice groups of young people being loud and carrying on in the hallways and lobby, then the building may not be for you.
7. Who’s responsible for the bins?
Taking out the bins may seem like a fairly insignificant issue but when you live in an apartment building – there’s a lot of rubbish!
Some buildings have a shared system where each week another apartment is responsible for taking out the bins for everyone. In most buildings, your Owners Corporation fee’s will include paying someone to take the bins out for everyone.
8. Owner Occupiers Vs. Renters
When looking to buy into an apartment building, try to find out how many of the apartments are lived in by the owners and how many are being rented out. I’d also recommend to find out if any apartments are being rented out as short-stay accommodation on websites like Airbnb.
The higher the ratio of owners who live in the apartment building as opposed to tenants, will generally ensure the building is better taken care of.
Also, if there is a high number of short stay or Airbnb apartments in the building then that is also something for you to take into consideration. This could present all sorts of issues with your enjoyment of your apartment and present some potential security concerns.
9. How safe is the building?
One of the main draw cards to apartment living is the safety and security.
Many new apartment buildings offer a range of swipe cards to access building entry and lift access to certain floors. Buildings are now usually all fit out with security cameras to ensure the safety of all residents.
If security is important to you, make sure you find out exactly how safe and secure the building is prior to buying.