Apartment living is becoming an increasingly popular lifestyle choice for WA home buyers, but how do you decide if it’s the right choice for you?
REIWA agent and Chief Executive Officer of Professionals Western Australia, Shane Kempton, said there are a number of factors home buyers needed to weigh up when deciding to buy an apartment.
Cost difference
Mr Kempton said the decision to purchase an apartment often comes down to a buyer’s personal budget and that apartments can be a good stepping stone to buying a house.
“Older style apartments in near city areas tend to be more affordable than building a new home in the outer suburbs. At a later stage you could consider renting the apartment and using the equity to buy a larger home,” Mr Kempton said.
With owning an apartment, the main additional cost you’ll need to cover is the strata fees, which you, as the owner, would pay to the body corporate/strata company for the upkeep of the complex.
“This money is used to maintain common areas such as gardens, and pay for special insurances such as public liability. You should check the cost of these additional fees before buying an apartment,” Mr Kempton advised.
Value and location
Like with any property purchase, the location is the most important factor to consider in determining the capital growth of an apartment.
Mr Kempton advises home buyers to choose an apartment that is close to the beach, river or city centre, as these are the areas that generally experience the highest capital growth.
In any real estate market, there is always the risk of an oversupply of properties regardless of whether they are apartments or houses.
"You should always focus on the location of the property and buy a property which has a scarcity factor, i.e. buying an apartment close to cafes and restaurants,” Mr Kempton said.
Investment
When it comes to purchasing a property for investment purposes, Mr Kempton said that apartments are a good choice because they hold a lot of appeal with tenants.
“Apartments tend to be easier to rent because the majority of tenants are young people who like to live near the city. There is also a good number of retirees opting for apartments as they offer modern living, minimal maintenance and the added
appeal of lock-up and leave.
“Before buying an apartment, check with local property management companies to ascertain what type of apartments are most in demand by renters in the local area i.e. one bedroom, two bedroom or three bedroom apartments.
"Another key consideration is how much rent you charge. Any property which has an excessive, overpriced weekly rent will be difficult to lease,” Mr Kempton said.
Originally published at realestateconversation.com.au.
