Buying an apartment in the Melbourne suburbs can be very risky when there are many factors that you need to take into consideration first. Real estate can be a money pit if you don’t do your research properly and wisely. You can get faced with many problems like high body corporate fees, inadequate capital growth negative equity, small floor plans and low rental yields. It is wise to be buying the right property the first time around to avoid future problems and headaches. When it comes to buying a property that is off the plan, such issues like those above can be hard to spot if you are going off the property’ by an architectural drawing.
Melbourne is experiencing an oversupply of apartments, creating an environment where we have more seller than buyers; this is called the buyers market. When you are purchasing in the seller market, it can be hard as you will feel you are missing out and everything around you is selling out fast. How exactly do you know when it is the buyers market? Going to auctions will help you to notice many bidders and the sale price is well over the advertised price. A buyers market is different; buyers are thinking more about the costs and risks dropping low. Buyers turn property development savvy due to the increase in choice.
The successful investors know how to profit from a market cycle. For any investment, you need to buy when people are selling and sell when they are buying. A simple rule, but it works.
It seems that 2020 is going to be a great time to be buying townhouses and apartments within Melbourne as we are heading into the buyers market. The key to buying the best investment property available for sale is to buy one that is in good condition, and you can get it at a reasonable price.
Mistake people make when buying townhouses
Buying off the plan: Many problems can occur like completion times and the sunset clause that offers developers a way to get out of the agreement along with the quality of finish.
A dime a dozen property: The ones that have limited space and terrible lighting, so owners find it hard to sell or even lease for a good profit price.
Buying properties with a sunset clause: A sunset clause is simply a statement that is often used by the developers that are selling the apartments that are off the plan. The clause puts a time limit on the validity of the contract. If the settlement has not taken place by a specific date that has been set in the clause, each party is entitled to end the contract. If this happens, the buyer will receive their full deposit back.
The Location: Many different apartments are popping up in the outer suburbs of Melbourne away from infrastructures and local amenities. To avoid ending up in a real estate money pit, follow the simple rules like walking distance to public transport, schools, cafes, parks, walking tracks and shopping centres.
Upkeep costs: Some apartments in Melbourne have big body corporate fees and structural issues that can cause the prices to crash within the property’s value. It is essential to do your research first before buying any property.
How to spot the right townhouse in Melbourne?
Buyers agents, investors, and so on have been buying properties successfully for over 20 years. The key factors that can affect the capital growth will apply when it comes to selecting a townhouse.
- A healthy balance of residential property and townhouses
- Minimum size apartment
- The lower number of townhouses in the complex
- Secured car parking
- Lifestyle options like parks, beaches, cafes and shops
- Low maintenance and holding fees
- Certain proximity to the centre of town
- High rental return at 4% p.a.
- Approved by the fire safety board