What are the pros and cons of investing in a commercial property?
What are the pros and cons of investing in a commercial property? Read on to learn more. ...
Investors, renters and home owners are increasingly turning to units — but what do you need to do to ensure you make the best possible purchase?
Apartment living is the new black. As property price growth continues, investors are increasingly turning down sprawling yards and multi-bedroomed houses in favour of more affordable units.
But unfortunately, apartment buildings can be wracked with building issues. According to research by the UNSW City Futures Research Centre, around 72 per cent of apartment blocks in NSW have defects, as reported by their owners. This increases to 85 per cent of newer units built since 2000.
So what can investors do to protect themselves from the time, cost, and hassle of building defects?
Sadly, there’s nothing anyone can do to guarantee they will ever be 100 per cent protected. However, ensuring you’re buying from a reputable developer or builder can go a very long way to avoiding the type of shoddy work that results in defects in the first place.
This often means a little bit of detective work before signing on any dotted line.
Check whether your builder or developer has home warranty insurance. Ask them for the contact details of a homeowner who can act as a (recent) reference.
Enquire about where their tradespeople are licenced, so you can verify them on the public register of their state or territory. Call an industry association or two, and check whether there have been any complaints made against them.
By crosschecking with all these different sources, you should be able to better understand whether you’re dealing with a professional, or a dud.
IF YOU SEE SOMETHING, SAY SOMETHING
The earlier any defects are spotted, the cheaper (and faster) it will be to fix them. And obviously the best person to spot these defects will be the person living in the unit.
When that person isn’t you, it can help to have a conversation with your tenants about reporting issues early. Sometimes tenants are hesitant to draw attention to problems for fear of being a nuisance. Other times they may not want to bother you, or waste their own time, if the issue seems small.
But by stressing the importance of reporting any cracks, leaks, exposed wiring, strange smells, or anything else that seems out of place, you may end up saving yourself from an enormous (and expensive) hassle. You tenants will also be spared some major hassle too.
USE AN EXPERT
It’s probably pretty obvious that an experienced property inspector will be able to spot defects much more readily than the average person.
But what a truly exceptional property inspector will also uncover are the intangibles. An exceptional property inspector will sort through strata documentation, and find out whether other tenants have complained about issues that may become a problem for your apartment too. They will know the background of the builder or developer, and be familiar with some of the weather issues specific to your apartment’s location, that may require inspecting certain aspects of a building more closely than otherwise required.
Understanding these little nuances can make all the difference between nipping a potential defect in the bud, and letting it develop into a much larger, nasty issue.
TAKE YOUR HEAD OUR OF THE SAND
We often think it won’t happen to us, and avoid worrying about a problem until it’s staring us in the face. But like with almost any issue in life, prevention will always be better than cure. And the earlier an issue can be identified and addressed, the better.
By taking the above steps, a buyer will be best positioned to minimise the issue of defects as much as possible. One less headache to deal with!
An apartment is a personal residence within a house or building occupied by several tenants.
A house refers to a building or property used as living quarters or an individual’s place of permanent or temporary residence.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.