Owning a home with plenty of backyard space is the dream for plenty of Kiwis, but with the housing market the way it is, home buyers are considering their options. New apartment buildings are popping up everywhere, and if you’re looking at buying one, here are five things to consider.
1. The ownership title
Apartments typically hold a unit title ownership. This means that you own the apartment itself and any other related areas like a garage or car park space. Not everything will be included, so it’s important to check what you actually own in the title of the apartment you’re considering.
2. Body corporate fees
When you purchase an apartment, you become part of the body corporate – a group made up of the owners of all of the apartments in the complex. You usually pay an annual fee to go towards expenses such as rubbish collection, and cleaning of communal areas, etc. It’s important to factor this cost in when crunching your numbers.
The insurance for a particular apartment is usually built within the body corporate fee. The body corporate group takes out an insurance policy for the entire premises, but this isn’t always the case. Make sure that you are aware of your insurance obligations and are fully covered where you need to be.
When looking to take out a mortgage to finance your apartment, make sure that it meets the lending criteria. Typically, to borrow up to 80%, the apartment needs to be at least 50sqm in size. Some lenders have different criteria depending on a combination of the number of rooms and the size of the apartment so it’s best to check first.
5. Building condition
If you’re purchasing a new build apartment, this one might be less of a concern for you, but you should still do your due diligence. Older buildings may be prone to leaking issues, and even if your apartment unit is fine, you may have to cover the cost of other apartments in your body corporate fees. Get an independent property inspection report to be on the safe side.
If you’re looking at purchasing an apartment and want to know more about how to get a mortgage approval, get in touch with our expert team today!