There are experts who do not recommend purchasing apartments in the heart of the CBD as the area tends to be overcrowded and the values do not always rise over time. However, if you know what to look for, an inner city apartment can produce attractive returns over time especially as space becomes more in demand in our capital cities. In here, I provided some key features to look into when deciding on an inner city investment property.
1. Architect Designed Exteriors
Apartments that have architect designed exteriors tend to have a larger advantage over buildings with cheap adornments and glass dominant exteriors. Architect designed buildings are also less common which in turn can command higher rents and prices.
2. Consider The Sound Rating
One of the biggest issues living in the CBD can be the noise from the street or within the apartment building. To determine the apartment that do not have this issue, find an apartment that has AAAC5 or 6 star rating as well as double glazed windows as they can reduce the noise. In additional, see if there are establishments near the apartment building that can potentially cause disturbance such as night clubs and restaurants. You do not want yourself and your tenants to be awaken in the middle of the night or 4 am in the morning due to people partying in night clubs and restaurants.
3. Choose One That Has A View
Find a CBD that has a view especially that this is one of the reasons why tenants want to live high above the CBD. More importantly, choose a view that brings in a lot of natural lighting into your apartment. A property that has good natural lighting as well as airflow is highly in demand.
4. A Unique Floor Plan
A lot of new CBD apartments tend to have similar floor plans. An opportunity to stand out to your competitors is to find an apartment that is a little different from the rest. Consider an apartment that has a well thought out floor plan and adequate living space as well as a car parking space or garage.
Do not let your tenants feel that they are living in a boring and common environment. Find an apartment building that offers floor plans that are somehow different from the pack as well as an apartment the can offer easy living.
A livable space is always in great demand. Look for a unit that has an internal space of at least 60 square metres, particularly 2 or 3 bedroom apartments.
6. 4 Years Older
There are several new apartments that have values that tend to fall in just the first few years after construction. While there are many reasons for this, this drop or post construction drop in values usually stops around year 3 to 4. Meaning, you can most likely beat the stamp duty by buying an apartment building that is 4 years old or more.
7. Determine In Advance Threats To Your View
There are cases when new owners of an apartment building suddenly discover that there are structures that are going to be constructed that can block their apartment’s amazing view. To avoid this from happening to you, search local council’s website and look around the particular area before buying an apartment building.
Within the area, look for structures that seem not in used, unoccupied or in need of repair since these structures are most likely to be target of developers. Once new buildings around your apartment structure are developed, you may find your views blocked by these new high-rise buildings. Make sure to research on any plans for the area and accept that most developments are beyond your control.
8. Hidden costs
There are apartment buildings that have great services and facilities such as pools, concierge, gyms, etc. Although, these are attractive to new tenants, many of them are aware of the additional cost of rent due to special features and services. As an owner of this building, you may need to increase the cost of rent due to operational and corporation fees. If you plan to add features and services, keep them at a minimum or make sure they won’t force you to add a lot on your rental cost. Many new apartment buildings have gyms, swimming pool and provide luxury living but they can add heavily for owner’s corporation fees especially as the building begins to age.