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Advice for first time apartment investors

Advice for first time apartment investors

Conrad Properties have, like most others have seen Auckland’s sky rocketing house prices more and more people are turning their sights to investments in apartments. The huge capital required to invest in your average kiwi house is something that is becoming more and more of a dream scenario these days. The NZ Herald recently reported that one in five Auckland suburbs is now a ‘million dollar’ suburb. Great if you already own your own home, but if you are looking to invest in more real estate it’s not so exciting. The return on investment is going to be affected by your ability to service a much larger home loan.

Huge capital funds are not a prerequisite for investing in apartments, all you need is some good advice. First of all, do your research and don’t settle for the first apartment you see. There are plenty of apartments out there, but not all of them are going to pay off in the long run.

Conrad Properties have written this article with the aim of ensuring your investment is one that is going to work for you. Conrad Properties can’t tell how much money to invest, but they can help you work out how much return you are going to get on your investment.

When buying an apartment as an investment the factors you use to decide on which property to purchase are very different to those you would consider if you were going to live in the apartment.

You need to consider how attractive the location of the apartment is going to be for the prospective tenant. If the apartments are centrally located in a big city, you are going to have much more interest from prospective tenants. Central city locations are going to appeal to business people and other inner city workers. A lot of new migrants are flocking to inner city locations as well.

Inner city apartments are going to be close to a range of transport options, as well as entertainment options too. The Victoria Residences is located right across the road from the Sky City Casino and Queen St is just minutes away. Ensuring that the apartment you are considering investing in has a range of entertainment will help to attract tenants. All Conrad Properties developments take this into account.

Another big draw card for tenants in centrally located apartments are directly related to what amenities and features the apartment has access to. If you are investing in an apartment you need to look beyond just the apartment. You need to see what else is on offer in the apartment building.

From when you first enter an apartment grand foyer, it should be apparent that you could be in fact be in a luxury hotel. Conrad Properties’ Victoria Residences has such an entrance way. This is exactly the greeting that means your new investment apartment will attract the right kind of tenants.

Beyond just looking amazing, tenants will expect extra features outside of the apartment. Victoria Residences has a 12 metre swimming pool, complete with Sauna and Spa that all residents have access too. Features like this are essential these days for investment apartments as you can be assured tenants will flock to such bonus extras.

Once you have found an apartment block that ticks all the boxes for location, luxury and extra features, you need to consider the apartment itself. Depending on your budget, you will be able to find an apartment that will suit your needs. The huge demand for apartments in central Auckland is definitely growing so you will have little trouble finding the right tenant. Single room, studio or multiple roomed apartments all depend on how much you have to spend in the first place. There is very little difference in demand for what size apartment you invest in, much of the demand is related to how amazing the apartment itself looks…or perhaps more precisely ‘where’ it looks.

Great views are always going to cost more, but these will also help increase the demand for occupancy for you apartment. However, if your apartment block has many of the above factors, your tenants may not be so concerned.

Finally, and also the best way to ensure your apartment is going to be a good investment, is to see how much rent the apartment will get. But how can you work this out? Any good developer will supply you with independent rental appraisals from real estate agents that have experience with inner city rental apartments. From here you can make quite accurate forecasts on how much income you can expect to make from the apartment.

Any rental appraisal you get is of course merely an assessment of what future returns could be and you need to make your own judgment too on the information. Your own judgment should also be combined with that of a lawyer. Conrad Properties will be the first to tell you that seeking legal advice is highly recommend. A good property developer will always be upfront with all aspects of their development.

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Content updated: 15/11/2018 17:08

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