Professionals Real Estate A large proportion of new apartments in Western Australia are now sold “off the plan” and this trend is set to increase in 2010/11 as renewed confidence in the State economy leads to the construction of new residential developments.
One of the important issues a property buyer has to consider when buying an apartment off the plan is to decide how many bedrooms you need.
The price difference between a one bedroom, two bedroom and three bedroom apartment can be significant and it is important to consider this issue very carefully before making a decision to buy.
If you are buying an apartment off the plan for investment purposes, it is worth remembering that a large proportion of people who rent, now live alone and therefore a one bedroom apartment may deliver the best financial returns.
Alternatively, if you are planning to be an owner occupier then a two or three bedroom apartment may be more appropriate as space is a key issue for this segment of the market. A good tip is to check the re-sale value of near new one, two and three bedroom apartments in the area you want to buy as well as likely rental returns for these properties.
This will give you a good indication of the potential resale value of the apartment you plan to purchase and the underlying demand for this type of accommodation.
Other key issues to consider when buying an apartment off the plan include:
- Location, location, location should be your guiding principle when buying a property off the plan. If the complex is located on a busy road without any nearby facilities then capital growth could be limited.
- It is also worth checking the future supply of other new apartment developments in the local area as this will determine the scarcity value of the property.
- If the developer has recently constructed a similar type of property, then ask for a viewing so you can see their work, and get an idea of what a similar type of purchase may look like. In particular, check the size of the bedrooms because more people are looking for larger bedroom space.
- When buying off the plan, it is important to ensure that the product you are proposing to purchase is reflective of what is built. For example, when the development is completed, the colour scheme and finishings of the property may not
- match the images presented on brochures during the marketing programme. A good tip is to check with previous clients of the developer to find out if they were happy with the finished product. For extra piece of mind, ask as many questions of the developer as you feel you need prior to actually making the purchase.
- Take the plans of the development and go “on site” if possible to determine the potential views of your property. If you are buying an inner city property then river views, for example, can add thousands of dollars to the value of the property.
- However, if the apartment is facing other buildings, then the resale value of the property may not be as great.
- When reviewing plans for the property, you should make yourself fully aware of the layout. Look for issues such as size and location of windows and the entrance to the property, as all of these items can have an impact on attracting potential tenants and future buyers.
- Check the small print of the contract to ensure that you are protected against any price rises in construction costs.
- You should also check that there are no clauses allowing the developer to vary the construction of the development. Simple issues such as small changes to the size of a balcony can have a major impact on the value of the property.
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