But first, let’s look at why good things come in small packages when you are talking investment properties.
An apartment is usually far cheaper than a traditional house. This is because the cost of buying a house includes the land value, and therefore has a higher entry price than a small apartment. And then there are the ongoing costs, which will be different for a house and an apartment. With an investment apartment, you own the unit, but common areas will be shared with the other owners. This means that you will be a member of a body corporate scheme or something similar and you will be required to pay body corporate fees for repairs and maintenance of these common areas. Sharing the costs with the other owners means that you won’t have to pay them in full, unlike with a house where you shoulder all the costs. Council rates are also higher for houses, and they even require land taxes in some states. So, when you are paying smaller fees on a small investment apartment, the returns on your investment can potentially be higher.
But how small is too small?
Apartments can go as small as a studio or one-bedroom units less than 50 sqm. Many lenders won’t finance properties as small as these (but some will!) along with small space properties in high-rise, high-density developments. Lenders have varying policies on size and location, so if you’re already eyeing a potential investment apartment, it’s to best to speak with your mortgage broker before making any decisions.
Now that you know the benefits of buying an investment apartment, here are our top tips on finding the one that is right for you:
Your mortgage broker can also provide a comprehensive report on any location you are interested in, chat to us if this would be helpful in your apartment hunt!
Having a good mortgage broker by your side can make a huge difference when looking for finance for an investment property. We’ll help you find the right loan appropriate to your needs. Get in touch now, so we can help you crunch the numbers!