Selling the dream & buying the reality.
Selling the dream: Engineered timber floors, Miele appliances, dark emotive colour schemes, marble look stone, and a model in a pool with a flute of champagne. This could be you!
Buying the reality: The complex backs onto a train line, it overlooks a busy intersection, and the pub next door has a pokies room with guaranteed trading hours to 4am, 7 days a week. Oh, and don’t let the manager see you with that champagne in the pool. Rule 1: No glass or alcohol in the pool area!
Now that I’ve taken the fun out of that dream, let’s get back to reality and dive into the necessary (and sometimes overwhelming) world of property due diligence.
There’s a lot to consider when buying an apartment so you need to do your research. The first property professional you’ll speak to is likely to be the developer or the selling agent. Of course, they know a lot about the product but they also have a vested interest in making a sale so they might not tell you everything you should know. And unless you're a property professional yourself, how do you know what you don’t know? You know where you want to buy, how many bedrooms, what your budget is but have you thought about… Environmental issues, layout, security, privacy, market saturation, storage, hotel letting, management rights, the developer’s reputation and past projects... Just to name a few!
Case study: Brisbane Casino Towers South Brisbane completed September 2018. This complex is positioned overlooking a busy road, backs onto a train line and situated near industrial property. It also allows hotel letting with many guests coming and going. From 1 January 2022 to 31th December 2022, there were 19 resales within this complex being a mix of 1 and 2 bedroom apartments. Of those 19 sales, 5 apartments sold above the original purchase price from 2018 (and that’s during one of the biggest property booms Brisbane has ever seen!). That’s an average loss of $30,000 per apartment.
Did these buyers do enough due diligence before they made the purchase? Did they fully understand what and where they were buying? Did the developer meet the needs of the occupants and the community?
Property research or due diligence is a necessary component of buying any property for any level of investor. We’ve made this process easy with our range of products designed to give you a better understanding of what you are buying beyond the marketing material. Developed by property research professionals not sales agents, we look at all aspects of the property – good, bad and ugly. Check out our products here: www.apartmentconsulting.com.au/products