The key here is to find an apartment renters will love, but will also get you a good capital return.
Is the apartment unique?
Let’s face it, when you put your property out to rent or sell, one key selling point will be what makes your apartment stand out! Open floor plan? Views? Layout? One problem with the new larger apartment blocks being built now is that when you are seeking a tenant or going to sell, there is a very good chance that there will be a lot of competition, so anything that can make your apartment standout and appear desirable is a good thing to leverage your investment.
Buy old, update and renovate? Which is best for investment purposes?
There is no hard and fast rule here. Making an old apartment modern will give it appeal, but if the rest of the block is run down and stays looking old then you will end up overcapitalising. Certainly a newly renovated apartment will get higher rental income and attract better tenants, so the best tactic is to look at the external facades and common areas, and then decide whether a quick paint job and re-carpet is sufficient, or if you should do the bathrooms and kitchens as well. Be careful, if the renovation costs are too high you won’t get the money back through higher rent, but you may pick it up in capital gain when you sell.
Big block or small block? The Savvy Investment!
We are fans of the boutique unit blocks, but a big block that has great views, is close to the city or has substantial amenities can hold terrific appeal to renters. Again, no hard or fast rule, this is something you need to consider along with levies, location etc.
Location, location, location!!
In times gone past you would hear people say don’t buy near train lines. No more of that nonsense! Being close to public transport is a key to getting good rents. But not too close! Local amenities like parks, playgrounds, and shops being a short walk away is also great, and don’t forget the local cafes.
Pools, BBQ arrears, roof top gardens, gyms and tennis courts
Let’s face it, would you rather live in an apartment where you can go outside and have some fun, or an apartment where once you get home you are stuck inside four walls. I think we all know the answer. Amenities will be great for renters, but they will come at a cost to you with higher strata levies so do your sums and make sure you can get enough rent to cover the extra costs to you in levies!
Safe and secure
We live in a world where people are much more cautious. An apartment / unit complex which offers security doors and intercom systems will make any new tennat feel much more secure and prevent people just walking in off the street.
A pleasure to live in?
Check what you see when you look out each window. Are you looking at a brick wall, someone else’s room, or are you looking at something pleasant like a garden, park, pool or district view. Which way is north? An apartment which gets the northern sun will feel much better than a south facing apartment.
Body corporate fees that don’t eat all your rent income
Any building with a gym, lifts, pools, and tennis courts will have high body corporate fees, and if you are not careful a significant proportion of your rent income will be lost. So, make sure you check the Strata levies, both the administration fees as well as the sinking fund. You should also be very careful to check the strata register and all minutes from any meetings held by the Executive Committee, Annual General Meetings (AGM) and any Extraordinary General Meetings (EGM) over the last two years. The minutes of meetings should alert you to any problems in the building.