Things to consider when purchasing a property

Things to consider when purchasing property

  1. Am I going to be happy to pay ongoing body-corporate fees which will increase over time? Apartments in Australia are generally well-maintained especially the larger more prestigious development. Monies to do this upkeep and repair will come from a pool of money which is contributed by each unit owner. This is called body corporate fees and is levied according to size, number of units in the development and facilities provided such as lifts, common areas and recreational facilities such as swimming pool, barbeque areas, library, sauna etc. More facilities will mean higher the body corporate fees. A considerable portion of the body corporate fees go to public insurance premiums and insurance for the building.
  2. Location. Does it have to be in the CBD? A CBD location is convenient to amenities and transport. Generally, there is more demand for rental properties in the CBD but remember that the supply of CBD apartments is also plentiful.
  3. Are you buying for the long term or short term? Property investment should have a time frame of 5-10 years to achieve decent growth especially when you are buying a brand new apartment.
  4. Are you buying for your own use or as an investment?
  5. Do you need a house or an apartment?
  6. Are you happy to pay land tax? Land tax is levied on investment properties and is based on the land value. If you invest in a house it is likely you will be hit with a land tax if you land value is more than $250,000. Apartments generally have lower land content and hence land value. However, if you have an aggregate property portfolio your land tax will be based on aggregate holdings.
  7. Is safety and security of your property important? In Australia we do not have gated communities like in Asia. House and land developments normally have an open concept. Apartments tend to have more security with highly secure entrance even with smaller developments.
  8. Is cash flow important? There are not many properties that you can buy brand new that will be cash flow positive if you have to use borrowed funds and if you are not a tax paying resident.
  9. Is capital gain important? Almost all properties in good locations will have a capital gain, the question is how much and how long will it take.
  10. Do you need a loan to buy this property? If you need a loan, can you meet the requirements to borrow in Australia or can you borrow overseas? If you are borrowing from an Australian financial institution you should check if you are eligible to borrow. For more information on how to borrow go to www.mortgagezone.com.au
  11. Research the developer and builder. To ensure you're investing in a great development that will be delivered on time, do your research on the developer and builder of the project. Look at their past projects and any industry feedback they may have so you can gauge their level of experience and workmanship. 
  12. A well thought out floor plan is essential - is there a lot of wasted space in hallways and corridors? Or is all the space utilised efficiently? This is especially important when buying an apartment!
  13. Good lighting - natural light is a must and it's legally required in bedrooms. 
  14. Aspect of your property - think about which way it faces. Does it get direct sun in the morning or afternoon? West-facing apartments will catch all the afternoon sun, and this deters some buyers. 
  15. The apartment block should have a nice street appeal, be well-built and generally low maintenance. This includes the exterior being made of quality materials that are built to last. Cheap or substandard materials will deteriorate quickly and owners will have to come up with extra money for the body corporate to repair any damage. 
  16. Decent size and good quality fixtures and fittings are essential. The minimum size for a 1 bedroom apartment should be at least 50 sqm and for a 2 bedroom 75 sqm and above if you are choosing to borrow more than 80% .
  17. If buying as an investment negotiate for window coverings to be included so there is no hassle in trying to do it yourself. 
  18. Always have a solicitor to look over your documents and contracts. Never sign contracts or enter into legal agreements without prior consultation with your lawyer or solicitor! 
  19. Is Sustainability features important- Energy Rating, noise cancelling technology, solar power, water harvesting features, green common areas, share car facilities, electric car charging points, edible gardens etc
  20. Amenities- What do you really need and will use.  Apartments can come with heaps of amenities ranging from common dining room, pool, sauna, barbecue, rooftop garden, cinema, games room, meeting rooms, library, lounge etc

Post a Comment