Practical Choices When Buying an Apartment For Investment
Apartment units are very popular with property investors, because they offer security, are relatively easy to rent out and if you buy in a good area, will experience excellent capital growth. Knowing how to evaluate an investment decision is important, but few investors consider the actual properties and if they are practical accommodation for prospective tenants. This can have a significant effect on how easily you will be able to rent the property out and ultimately the price you can fetch when selling it.
Starling with the kitchen, is it practical to only have one kitchen sink? Have you ever attempted to do the dishes this way? Also, how many kitchen appliances do you own? How important would it be for you to be able to have a standard size fridge, microwave and two spaces under counter for a washing machine, dish washer or tumble dryer? Many property developers do not take these basic needs into account and will subsequently become your problem when you fail to rent the property out.
Bathrooms are also a focal point. If the unit has two bathrooms, is the main bathroom en-suite? Does one bathroom have a shower and the other a bath? If there is only one bathroom, does it have both a shower and a bathroom? Men like to shower and women prefer to have a bath. If you fail to cater to both sexes, your unit will not be desirable!
Ensure that the main living space can support a wall unit and at least 2 - 3 couches easily. If the unit is on the first or second floor, it should have a reasonably sized balcony as it adds to the living space. Ground floor units should ideally have an enclosed garden. This will allow you to cater for prospective tenants with small pets. South Africans love 'braai-ing', so ensure that the unit has one of these.
Regarding the style of building, many investors prefer to purchase a 'face brick' unit because they believe that these units are easier to maintain. Although, this might be true, many people do not share the sentiment and shy away from this style at all costs. Units which are plastered and painted are easier to rent out and will fetch a higher rental for sure.
It is also important to consider the complex (development) itself in terms of the ratio of investors to those who have bought to live in the units. I have seen many a complex where all the units are owned by investors, which has figuratively 'gone to the dogs'. Tenants will never care about the upkeep of the complex and I would therefore strongly recommend buying in a complex where there is a minimum ratio of owners who occupy the units are 50%.
When buying an apartment, be smart, be practical and ensure that you could live comfortably in the unit. If you can't, then the chances are high that no one else will.