Investing in apartments

Lots of people ask us questions about investing in apartments. Here are a few of the most frequently asked questions and our answers.

What's good about investing in apartments?
Buying an apartment is a low cost entry into the property market. The cost of an apartment (especially a studio apartment) is cheaper than a house and the returns are often higher than other property investments. People find apartments easy to look after being compact (cheap to renovate and furnish). New Zealand is growing and there's a tendency for more people wanting to live in central areas with petrol costs rising.

What kind of returns can you expect from apartments?
Generally speaking property investors go for studios or compact one bedroom apartments as the returns are higher. Net returns on a good apartment could range between five and ten percent. Fully furnished apartments realise a higher return on your money and it's not uncommon to achieve upwards of 11% net.

How do you pick a good apartment?
Good question! Look for quality apartment buildings with no major defects that have a good body corporate in operation. Think location (good part of town), size (not too small), views (nice outlook), facilities (gym, pool, spa, garden), and carpark if you can get one. Walking distance to supermarket, transport and local shops. Write down a 'wish list' and use it as your guide.

Should I buy an apartment without a carpark?
Carparks should be viewed as a bonus and if you can secure an apartment with a carpark you'll rarely be short of a tenant. However, apartments without carparks should not be overlooked as not all tenants require one. Think of carparks as nice to have but not a necessity.

Got any hot apartment tips?
Of course! Who hasn't got an opinion on apartments? I would suggest you check out the body corporate fees and rules before buying, and make sure the apartment complex has a long term sinking fund. Read the last AGM minutes as this will often give you a good indication on how the apartment complex is being managed. The minutes will usually tell you if there are any problems. Visit the local council and check if there are any building plans that may block out your view. Don't forget to talk to other owners or people that live near by. It's amazing what neighbours will tell you about the building or area.

What is due diligence?
Due diligence means doing your homework before you buy so there are no nasty surprises you didn't know about. Like any property investment a bit of due diligence will enable you to sleep at night. Visit the apartment complex in the morning, afternoon and evening and get a feel for the place and location. It goes without saying that you should make sure you haven't got a night club next door (or Karaoke bar) that could harm your tenants quiet enjoyment of their rental apartment.

Where do I start my search for apartments?
Apartments.co.nz of course! The name says it all! Check out apartments for rent and sale and research apartment buildings. Also, check out your local newspapers and supermarket notice boards.

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