Rising housing prices, new urban lifestyle needs and significant investment opportunities have seen the popularity of apartments rise in New Zealand. Apartments are becoming an increasingly prominent choice for savvy investors who are looking to capitalise on these trends.
If you’re thinking about investing in an apartment, please be aware that this is a very different market. Unlike houses, apartment prices tend to be lower but the percentile return may actually be better.
Buying an apartment, in fact, is considered to be a cheaper option for investment. Lower outlay may mean less risk and also a wider range of investment choices. It may even allow you to buy two apartments instead of one house. On the flip side apartments in Auckland have a poor reputation for quality so like everything else do your homework and always insist on seeling the last two years Body Corp minutes as these are a good indication of any known problems.
Apartment Investment Essentials
One thing apartments do have in common with houses is the golden rule of property investment: Investment property quality is critically important.
Apartments come in all shapes and sizes and both new and old apartments may be very good investments. It’s the investment values of the property that you need to consider. Critical considerations for purchasing an apartment include:
Size does matter: Big modern apartments are very much in demand whilst anything under 40 sm can be difficult to mortgage
Onsite amenities and facilities: A well-appointed apartment block delivers significant extra value for investment purposes. If the block has a gym, a swimming pool, or other amenities, these are major positives
Rental values: Good rental values are a major plus and may be expected to rise over time. Good rental income is often considered a major benefit for retirees and older investors who are not looking for capital gain
Capital gain values: This is an area where apartments differ significantly from houses. It’s advisable to check price history, local market performance, and market trends. Capital gains are very much subject to local influences and newer blocks going up
Body corporate fees: These are not necessarily a real obstacle for investment, but may represent a significant cost, they cover the cost of common maintenance and insurance so keeping the building in good order
Rates: Rates have to be factored into any investment purchase
Ask iLender about Apartment Investment
iLender is one of the leading mortgage brokerages in New Zealand. We can provide any assistance you need for investing in an apartment property including home loans, investment mortgages, equity loans, and expert advice and market guidance. We will help you make an informed decision regarding your purchase. Give us a call on 0800 LENDER and ask to speak to one of our experts.