Did you know that if you buy a property under a certain size, you may not get finance approval for it? Or that some apartments restrict who can actually live there? (Student Accommodation can only be occupied by students whilst they are actually enrolled in their course). If you did, great! Most people don’t and simply buy because something appears to be decent value.
As the article below details, many apartments have been bought off the plan, with settlement being a year or two off. As the time gets closer, they approach the bank and get a rude shock when told “Thanks but no thanks”. But the rent is guaranteed and I earn a good income. “Thanks but no deal”.
These are just a couple of traps that can have quite devastating consequences. There are a significant number of apartments due to settle soon that simply won’t. The purchaser will default, lose their deposit and still be potentially liable for further damages. That great investment is suddenly a disaster that can set you back years. There are many more such traps.
Investment is principally about obtaining a return. Either an attractive income (or yield) or a capital gain. Residential property has historically provided a great capital gain (prices have kept increasing). Industrial property did for a while also but is now mostly appealing for the (income) return; growth is much lower. The ideal is to obtain both but it is usually one or the other. Who would buy a home or unit if the return was only 3 or 3.5% unless prices were expected to increase reliably? If the return is high, an essential question is Why?
The single most important piece of advice is to undertake research. Speak with your trusted advisers (accountant, agent, financial planner, solicitor etc.). It takes a long time to save money and it is very easy to lose it. Please like our Facebook page to keep up to date on all things property.