It is currently a buyers’ market in QLD when it comes to apartments. Supply has outstripped demand, especially in Brisbane, so investors can pick and choose from a wide range of modern, well-designed buildings.
This can be particularly attractive if you live in an overheated market elsewhere in Australia making buying interstate can be a great option. It doesn’t take much work to gain an understanding of a new market, with the opportunities for success quite significant.
To make sure you make the right moves, it’s important to do your research thoroughly before taking the plunge. Here are seven areas to consider:
1. Absorb as much knowledge as you can or talk to an expert
Whether you think you know an area well or you know you’re moving into uncharted waters, it is essential to conduct a search on the history of property records and the area thoroughly.
Otherwise, you could end up paying more than you should, or investing in a property that may not deliver the returns you anticipate. If you don’t have the time to do the research yourself or you’re not sure where to start, consider working with a real estate agent. They can help identify a suitable property for you. If you’re buying off the plan, see if you can look at
previous projects by that developer and, if possible, talk to owners.
2. Be aware of potential growth inhibitors
A property that looks great on the surface could be marred by a potential new development nearby, a high crime rate, or high vacancy rates among neighbouring properties. Don’t be complacent; make sure your research is thorough and comprehensive.
3. Become a local area expert
Before signing on the dotted line, talk to area experts such as local property managers to find out whether there’s anything else you need to know about the area, the project, or the property itself. Also, if the body corporate report has a high level of fees in arrears, this suggests it’s not terribly well managed and could run into trouble down the track when major repairs or maintenance are required. Unless you’re willing to work to change things from the inside, buying a property of this nature could be more trouble than it’s worth.
4. Don’t forget building and pest inspections
Like any property, you need to get a building and pest inspection to make sure you’re not buying into a bunch of problems.
5. Know what fees you’re up for
You need to know what the body corporate fees are as well as any other fees that may be charged. Compare these fees to other, similar properties to make sure they’re reasonable. If you’re not clear on what the fees cover, make sure you ask plenty of questions so it’s crystal clear before you sign up.
6. Maintenance costs
As well as mortgage repayments and potential rental yields, you’ll need to consider the costs of maintaining your own apartment. Body corporate fees only cover maintenance of common areas, leaving owners responsible for your own property, so consider setting aside your own sinking fund for unexpected repairs as well as ongoing maintenance. You may also need a property manager as well as a letting agent. Do your research because quality, proactive service can be more important than cheap fees.
7. Other checklist items to consider
As well as knowing what you’re up for in body corporate fees, it’s important to check whether your body corporate is well-run, the sinking fund is sufficient for major works if required, and that the building is up-to-date with repairs, fees collection, etc. Here are some other things you should check:
- Is your body corporate party to any contracts?
- Have you read and understood the by-laws?
- Do you understand your maintenance responsibilities?
- Do you understand the role of the body corporate manager and onsite manager?