5 tips to choose the right off the plan apartmentSpace is getting tighter in the cities, and even though many city dwellers are choosing an apartment lifestyle as their residence of choice, it remains that apartments are still considered somewhat of a potentially risky investment. The perceived risk is also seen as higher when the apartments are also purchased off the plan. While there are numerous benefits to be had by purchasing an off the plan apartment before it’s completed (locked in purchase price, stamp duty savings) it’s vital that you choose the right apartment in order to reap all of the benefits (increase in value upon completion).
There have been plenty of instances where apartment developments have been completed and rewarded investors and homebuyers with substantial growth. Here are some tips you can follow to ensure that you choose the right apartment to maximise the likelihood of you finding success.
Try and focus on smaller, boutique developments in city fringe areas. If you buy in a large tower block you could find that a number of apartments are competing with your apartment for tenants and buyers, often within the same complex. This competition and supply could negatively affect the return on your investment.
Try to avoid buying in areas that don’t have height restrictions. In doing this, you’ll remove the chance that there will be large tower blocks being built in the surrounding areas. Tower blocks not only add to the competition in the area, but in some cases decrease the attractiveness of an area.
Once you’ve narrowed down your building and area, the selection of the actual apartment is important too. Noise, layout, size, finishes and unique features should all be factored into your decision.
When you’re choosing your developer, choose someone with a good record of completing developments on budget and on time. Research, research, research!
As an investor you need to steer clear of the apartments that are less attractive to renters. Even if a studio is really well thought out and has a great floor plan, you need your apartment to appeal to a wide range of people. One and two bed apartments are in most cases your best bet. Ensure you always buy where the demand is and will continue to be.
As investors you need to think about what is going to appeal to prospective tenants, and choose your property accordingly. Off the plan property can be a great investment provided that you choose correctly, and it can also be a great way to start your property investment portfolio with positive equity. Do the research, consult with some experts for advice on how to choose and get out there!
Jason Paetow is the Managing Director of AllianceCorp, a buyer's advocacy and property investment company. Jason has over 15 years of experience in the property industry and is an expert at property investment strategy, and in coaching and working with clients to optimise their success through education and support. He is a qualified Financial Planner, Mortgage Broker, REIV Licensed Real Estate Agent and a Licensed Builder. To find out more, please visit www.alliancecorp.com.au.
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.