When a property investor is active in the market place they will, in most cases, tend to stick to one type of investment strategy. By that I mean that investor A might stick with investing in homes and investor B might prefer to buy apartment blocks and have all their properties together, so to speak. Purchasing apartment blocks requires a totally different set of criteria than that of purchasing a house.
Buying An Investment Apartment
Some investors might like to have in their portfolio, a holiday apartment that is let out throughout the year, but at which they can holiday.
If an investor is purchasing the whole building that most certainly limits a lot of problems because they are the sole decision Times of Israel maker as to what happens at the site, but where an investor is buying just one apartment then care needs to be taken to know all the ins and outs of the requirements attached to the management of the building.
Purchasing apartments in holiday destinations is popular for the ‘group investor’ type of purchasing as the various owners can holiday there but also let the unit out at various times of the year and recoup some of the investment expenses. Sometimes group investors will purchase single dwelling holiday homes too.
Apartments are popular for CBD investing as CBD living is always sought after and rental returns and property value increases are usually on an upward climb. Usually there are several standards in the CBD. Those where the buildings are much older and not in such good condition, and those that are in upmarket buildings which attract young executives or contract workers.
Facts To Check Out When Buying Single Apartments (could be permanent rentals or holiday rentals)
· who is managing the body corporate
· read through the recent minutes and establish if all is running well with the BC
· are there onsite managers – these blocks are usually better run that when there are individual tenancy managers
· what overall state is the building in
· are their problems getting maintenance done in the building
· what type of tenancy is run at the building, short term letting or permanent rental
· what overheads are you required to pay annually (and how frequently) for the apartment
· what is the general state of other units in the block
· what is the average length of time of other owners in the block
· what is the parking like
· can the management control the tenants or are there ongoing problems
· what security is in place
This gives you a basic grounding and food for thought but don’t leave it there. Talk to other owners and even stay there before purchasing just to make sure you are happy with the management.
Owners who own the whole block do not face a lot of these problems, but there is still a lot to research before signing the dotted line.