I’m new to PI and am trying to learn as much as possible.
As the market appears to be flat at the moment especially in Vic and NSW. Is there anyone buying apartments in the Melbourne and Sydney?
They appear to return a higher rental return and have lower maintance issues, especially apratments that are 5-10 years old.
They do have a lower growth but isn’t that not a issue in flat markets?
Is there any hidden issues that others have discovered?
There are several issues with apts. Just to name a few:
1. Its far easier to get an oversupply of apts than houses.
2. Low land content = lower capital growth in most cases (however apts in prime locations can in fact have a high land value and high growth). This needs to be calculated.
3. High body corporate fees and or onsight management fees.
4. Get a building inspection and get a body corp report and check the sinking fund has an appropriate balance
Having said all that ive found some extremely +CF apartments in no time flat with high land value and low BC fees.
The biggest problem to me seems to be developers have a large influence on the new apartments and thus lots of first time buyers get burnt by the developers and hence there is a lot of stigma attached to apartments.
But if you just crunch the numbers thoroughly and predominantly stay in the second hand market or only deal with developers that are being forced to sell than its way safer.
Additionally what you will find in this forum is a dislike for apartments because ultimately many people in here like to do the developing to make the cash, and you cant do that much with apartments.