Buying off the plan or brand new

When buying a brand new apartment or townhouse the thought of being the first to live in a property can be pretty tempting. But what are the pitfalls?

History is the often the best predictor of future performance when it comes to property values. So it will be hard to gauge which properties and developments are likely to offer the best growth.

Here’s what else you can’t tell with a brand new building:
• Quality of the build (the faults will not have yet revealed themselves)
• Quality of finishes and the way they will wear
• Natural light (unless it is complete)
• Future warranty claims and possible legal battles
• How the building will be accepted/regarded by buyers in the long run
• How tightly held the building will be
• What percentage of apartments the developer will hold onto and whether they will flood the market in 5 years time

You may find you get better value in a nearby building which is only a few years old…

For more information on buying property in Sydney go to www.gooddeeds.com.au.

Image courtesy of freefoto.com

How to pick the best apartment in a large complex.

Obviously, you can go straight to the top and buy the penthouse, but what if your budget is not so lofty?

We advise our clients to be very wary of large complexes. There is often more than one apartment for sale at any one time, which may offer you choice when you are buying, but can be a problem when you go to sell.

So, if the location, facilities and overall style of the complex appeals to you, how can you ensure you buy the best apartment? Here is a checklist:

· Natural light – the higher up in the building you are, generally the better natural light, however the aspect is crucial so look for a north, north-east or north-west aspect from the living areas.
· Privacy and outlook – preference should be given to apartments that look outside the complex (depending on the outlook of course – or unless there are fabulous landscaped gardens) rather than into other apartments.
· Proportion of rooms – sometimes the bedrooms are larger than the living area, or the ensuite bathroom is larger than the main bathroom, or there is wasted space in foyers and hallways. All these scenarios should be avoided.
· Outdoor space – this should be usable (is there space for a table, chairs, bbq?) and accessible from the living area.
· Noise – avoid apartments next to the entrance, opposite the lift, overlooking a noisy road, etc.

For more information on buying property go to www.gooddeeds.com.au

Strata levies - low levies can be a false economy

Sometimes when pensioners or investors dominate the ownership of a building or complex we see historical pressure to keep strata levies low. The discretionary portion of the levy is the sinking fund contribution, so when building issues arise, or upgrades are required, there is no money in the pot. So, what happens next? Either the issues are ignored, the building begins to look shabby, or a special levy is struck. And, if you are interested in capital growth, all these outcomes can negatively impact the value of a unit or townhouse.

It is now mandatory for owners’ corporations to undertake a 10 year maintenance plan and levy forecast. Those buildings with low levies will face sharp rises if the recommendations in their report are adopted. Those buildings that have been responsible in their financial management and avoided the temptation to keep levies too low will see much more modest increases.

For more information on buying property: http://www.gooddeeds.com.au/

Strata reports - often a long list of repairs is a good sign

When you read a strata report that documents a litany of building issues it can be easy to be scared off a property. And sometimes it is a warning of impending inconvenience and cost. However, it can also indicate a pro-active strata manager and an owner’s corporation that cares about maintaining their investment. In addition to the list of problems, look for a concerted and continued effort to address the issues. And keep an eye out for potential special levies. This is a sign that there has not been sufficient sinking fund levies in the past to cover these expected repairs.

For more information on how to avoid pitfalls when buying property: www.gooddeeds.com.au