With the cost of detached dwellings on the rise, apartments are emerging as an excellent way for investors and first home buyers to get in on the property boom. But not all apartments are created equal. When apartment hunting, established apartments are often considered the safer option, offering old school charm and solid bones. We have created a complete guide to buying an established apartment to help you sift through the market and pick a solid investment or home.
What to look for in an established apartment block?
Older style apartments are still a hot commodity, but with a much lower price tag than a detached dwelling. However, they do have their potential drawbacks. There are a number of things to keep an eye out for when shopping around for an established apartment.
Apartments have definitely decreased in size over the decades. Art deco style options, or even younger models, are a whole lot more spacious than today’s offerings. Unfortunately, modern layouts, although smaller, are a lot more liveable. However, snapping up an established apartment with a bigger floor space will allow you to renovate the floorplan to your liking and truly make your house a home.
Better still, an older style, established apartment with a balcony, courtyard or communal outdoor area will be sort after for years or decades to come.
Established apartments with original well-maintained features and an overall lovely character/vibe will hold their value longer, making them a better investment. Unfortunately, these types of apartments are becoming harder and harder to come by, so if you aren’t lucky enough to get your hands on one, look for an apartment with a lot of ‘potential’ and work your renovator’s magic.
If you’re on a tight budget and not willing to splash out on renovations and repairs, a quality apartment should be on the top of your list. Quality, well-maintained apartments will also last longer, meaning your investment will go further. Look out for obvious damage or shoddy repairs, as they can indicate bigger issues lurking beneath. Remember, with any established apartment or house, you should always be prepared for maintenance at some point.
Just like apartments with good character/vibe, old school apartment blocks with good street appeal are also getting harder to come by. Apartments from the 50s or 60s have a charm that modern blocks just don’t have, making them the most sought-after type of apartment on the market. Of course, you will pay more for this apartment-style, but they are more likely to hold their value and be a better investment in the long run.
Potential to add value
If you want to make the most out of your investment, you need to look for ways to add value. With the market for older style apartments becoming more competitive, searching for a diamond in the rough might be the only way to see some solid returns. Look for apartments that can be updated with simple, budget-friendly tactics. Sometimes a lick of paint and some modern fixtures can turn drab and dreary into fabulous. However, be warned that major renovations may be challenging to get past body corporate or may end up costing a lot more than expected.
An apartment which will be financed
Surprisingly, not every apartment is guaranteed to get finance from a lender. For example, apartments under 50m2 are considered a risky investment by lenders, as they may be difficult to resell. Additionally, not every postcode is created equal, with some being labelled as unaccepted by the banks and not applicable for full mortgage insurance.
Luckily, established apartments in boutique blocks are unlikely to fall into these categories, but it is something to consider when apartment hunting.
Position and location
Geographic location is the most crucial factor to consider when searching for an apartment, as it will affect your quality of life and your resale ability. Some suburbs in Sydney and Melbourne may be out of your price range, so hunt for up-and-coming suburbs with good amenities and a lot of potential.
The position of the apartment within the block will also affect resale and liveability. Apartments on higher floors offer more natural light, privacy and better views. Lower floors are easier to access, so they are suitable for older people, people with kids and people with a disability. They could also house a small courtyard or outdoor area. However, they tend to be the noisier option.
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Things to look for during an open inspection
Signs of water damage can point to more extensive, costly problems, like eroding plumbing or structural issues.
Check if the body corporate has any major updates on the horizon and whether or not they fit into your budget.
Cracks and raised tiles in floors and walls
This could be another indication of plumbing or structural issues and could end in a very large bill.
Lights and electrical
Check everything is working, and the switchboard is up to scratch, or be prepared to update the wiring.
Doors and windows
The community noticeboard
A noticeboard can paint a thousand words. It could provide insights into how issues are handled between body corporate and owners and tenants, e.g. if they are handled appropriately and in a timely manner.
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Do your strata research
A strata search will give you excellent insight into the history of the building. The search and resulting report, which should be conducted by a specialist, will reveal any past noise issues, major defects, repairs, and any future expected expenses.
It will also outline the rules and bylaws of the building, such as pets and parking, and whether these bylaws are causing issues for the current occupants.
What are the must-haves with an established apartment?
- Good storage – ideally in the apartment or somewhere secure in the block
- Well maintained gardens and common areas
- Good street appeal
- Parking for yourself and guests
- Structural integrity
- A safe balcony
- Working, well-maintained plumbing
- An up-to-date building and pest inspection
What are the pros and cons of buying an established apartment?
- Unique designs: Older apartments offer unique designs and layouts instead of the minimalist, cookie-cutter apartments being produced today.
- Space: Older apartments tend to be bigger than more modern options.
- Character: Apartments from certain eras have a lot of character, with interesting ceiling details, light fixtures, fireplaces and more.
- No surprises: Buying an established apartment, rather than off the plan, means you will know exactly what you are buying.
- Lower fees: Because older blocks lack amenities, strata fees tend to be lower.
- Layout: Older layouts are less liveable than open plan modern offerings.
- Repairs: An older apartment might have a lot more maintenance issues than a more modern option.
- Fewer amenities: Amenities are a rarity in older apartment blocks, so if you’re looking for a gym, spa or pool, an off the plan or modern apartment might be for you.
Words by Nell Matzen
- Buying an established apartment
- Your guide to finding the right apartment in Sydney
- How to find the hidden flaws in older apartments
- What is a strata search or inspection report?
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