Advice on new apartments??

[marleyblue]

Hi, I'm relatively new to investing with just the one IP but busying looking to add. I've been a long time reader of the forum and love all the knowledge and experience shared by so many.

My strategy is focused on purchasing low maintenance, high depreciation units in inner ring suburbs 5-10kms. Blocks of 8-12, walk-ups with low strata are my preference to buy and hold for 10+ years.

I've read plenty of warnings about buying in large apartment complexes (would never do) and the drain that strata can have on absolute return and most seem to advocate buying older units and renovating.

My question (finally) is what are people's thoughts/experience of buying new apartments - any advice?

 

[The Y-man]

From my personal experience:

- spend the first 6-12 months waiting for things to break and claiming on warranty (as well has having to discount rent etc while your tenant goes without <xyz>

- structural issues that suddenly become apparent and you need to go argue with the builder about

- things you forgot weren't included - like curtains, blinds, doorstops, light fittings, telecom conduit, TV antenna etc

- high depreciation means just that - their resale values drop!

- unbelievable rate of wear of new floors/carpet/fittings/fixtures etc by tenants.....

I'll stay with 3+ years old props....

The Y-man

 

[marleyblue]

Cheers YMan - so your advice is avoid brand new and look for something a few years old?

 

[The Y-man]

Cheers YMan - so your advice is avoid brand new and look for something a few years old?

Yep..... also sus out what will grow next door to block views etc.

The Y-man

 

[danwatto]

A couple years old is good. The "new car smell" effect has been paid for by someone else.

When I start buying in Sydney again, apartments will be my target but those that are post 1990 builds for some depreciation benefit. Any depreciation is good, once you get a few properties it all adds up and you don't need any one with massive amount that comes from a new one.

 

[jpcashflow]

Hi

Hi,

Like others, I would suggest staying away from new places like apartments in new sites.

Capital growth is limited the buildings age to quickly.

There are plenty of other good opportunities out their

 

[free_dom]

Sorry to high jack the thread. The new development in Summer Hill (Sydney) is up and running. Be interesting to see what growth the buyers get from it over the next few years. I think the growth might be alright. Anyone bought into it?

 

[Redom]

Its true, you're paying a bit of a premium for new.

However their are benefits to it too (easier to rent, better tax benefits, govt incentives distorting in favour of new).

It doesn't mean its always bad though, personally i have invested solely in new properties and have had significant success (/luck!), but it was more by limited options (OTP was all I could afford), than my first choice.

Cheers,
Redom

 

[marleyblue]

Thanks for the replies - it's interesting hearing differing opinions. My focus on newer apartments is low maintenance, depreciation benefits and ability to purchase in better located suburbs asopposed to purchasing a house. Buying a few years old makes sense!