A newbie to investing and still learning I am wondering if investing in newly built apartments in a blue chip suburb e.g like StKilda is a good investment idea.
Are there any hidden things about new apartments like…… no one usually like to rent in them…….
Body corporate costs will kill you……….
I am thinking that I can depreciate the apartment, and the appliances and fittings and its in StKilda what could go wrong
I would be looking at 1 bedroom apartment approximately about 70m2 including the courtyard
OR
Is it better to buy an Old flat in StKildaAny thoughts or adviseIt would depend upon your strategy (buy & hold vs buy & sell in short term). There is generally no capital appreciation on new apartments for several years due to the price of a new unit incorporating the developer's margin. You will find that the price of a resale of a 'new' unit is about the same or less than its previous sale when sold within 3-5 years of the construction. Once they have passed this stage, they are no longer 'new' but newer than old units.
I've a couple of thoughts to add here:
a) 1 Br Apartments. These are the bottom of the market and hence are attractive to those seeking affordability. As such, they are likely to underperfom the median house price growth and rent. If you can, you are better off with a 2br second hand apartment than a new 1 br apartment.
b) How do you plan to make money from this investment? Growth, Income or Both? It is smarter to start with your profit and work backwards to your property, than to start with your property and work forwards to your profit.
c) You are right about the hidden costs. Be careful with body corporate, leasing charges, extras (pool, gym etc), carparks, noise (check construction for soundproofing), stairs / access (impacts rental if hard to move in and out – ground floors tend to rent for more unless there is a view).
d) Finance – make sure you shop around for a financier as some will not like apartments less than a certain size.
Food for thought. All the best,
– Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
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