Buying an apartment is quickly becoming a viable and preferred option for many first-time home buyers. As Auckland continues to invest in more apartment buildings, as a way of compensating for its housing shortage, don’t be surprised if apartment living becomes increasingly common.
If you are looking at purchasing an apartment, make sure you are fully aware of everything that comes with buying off the plans.
Freehold or leasehold?
It’s very important you understand whether the apartment you are buying is freehold or leasehold, as it will directly affect your ownership rights.
In most cases buying freehold is the ideal outcome. This will mean you not only own your apartment but you also own a portion of the land as well.
Whereas purchasing an apartment via leasehold, means you are essentially renting the land the apartment block is on. While you will still own the apartment, you will need to factor in the additional costs that are associated with annual ground rent.
What does your body corporate do?
The buildings body corporates will be responsible for the day-to-day upkeep and maintenance of your apartment building. While this is great because you won’t have to spend your weekend vacuuming the common areas or cleaning the pool, you will have to pay annual fees.
Every body corporate is different with their own set of rules and fees. Before you sign on the dotted line, make sure you have a good understanding of the fees you’ll be required to pay and what these fees go towards. On top of this, make sure you understand the additional charges that may arise if you course damage to the building or a large scale renovation takes place.
Understanding exactly what fees are associated with a building will be key to helping you gauge whether moving is financially viable.
Is it a good location?
It’s no secret that a good location is at the top of every prospective home buyers shopping list. While buying an apartment in the middle of the city with views overlooking the harbour is ideal, it may not be viable, especially if you’re a first-time buyer.
As New Zealand cities, especially Auckland, continue to expand it’s a good idea to understand which areas are being developed and on the up. Suburbs on the outskirts of the city, are an excellent place for first-time buyers, as they are still within a stone’s throw of the city and they won’t cost you an arm and a leg.
Do you know the developers?
Doing your research is a natural part of buying a house. If you are looking at buying an apartment off the plans, make sure this research includes the building’s developers.
Is this their first apartment build or do they have an extensive portfolio of successful builds? Having a good understanding of the developer’s reputation and history will give you a good picture of whether the build will be a sound and a worthwhile investment.
Make sure you understand the plans
Having a solid understanding of the plans and layout of an apartment is critical. Although, you won’t be able to physically walk through the floor plan, getting a gauge for the layout will determine if the space suits your current and future needs.
A lot of developers now offer display or show units which will allow you to visit and experience a mock version of how the apartment will look. Also, with new technology available, it is becoming increasingly common for developers to have virtual or 3D videos that’ll allow you to see what the end product will look like.
Buying an apartment off the plans can be a very good first step onto the property ladder. With the Auckland housing market becoming increasingly tight and prices still extremely high, apartments are a relatively cheap option.
However, with more and more apartment building popping up you may be required to make your decision based on the plans. Make sure you understand exactly what you are buying, it may be a bit of a leap of faith but chances are this will be a great first investment.
If you would like to discuss the process of purchasing an apartment off the plans or any other questions you may have regarding buying a house, don’t hesitate to contact us today!
CONTACT COLIN TODAY
027 643 5454