Visit as many places as you can look for properties that fit your criteria, so you’ll have a good idea of what your money buys.
“Put yourself in the tenants shoes and ask yourself… Would I want to pay rent and live here?” he says.
“Buy in locations where tenants want to live, close to lifestyle areas where you are walking distance to cafes, shop, parks, hospitals, schools, work, gym and Public transport places.”
You should consider the age of the building. Are any facilities likely to require repairs or replacement? It is strongly recommended that you obtain an architect or engineers report on the building before deciding to buy.
A small complex with a high ratio of owner-occupiers is a great place to park your money, as owners will generally look after the day-to-day running of the block more carefully than renters will. They will also ensure the common property is maintained and you’re more likely to have a proactive executive committee.
Quick, low-cost renovations can have a huge impact on your property’s value. “Renovate your apartment to manufacture instant capital growth and maximize your rent. Use a value to ensure you don’t under or over capitalize.”
How old is the building? You should consider the age of the building. Are any facilities likely to require repairs or replacement? It is strongly recommended that you obtain an architect or engineers report on the building before deciding to buy.
What are the security measures, for example, can anyone walk into the building? Are there any security cameras?
What are the maintenance charges?
Many people don’t think of this aspect when they buy a new apartment. They will generally cover the municipal tax, property tax, assessment tax, water charges, common electricity charges, elevator charges and charges for hired help, like the garbage cleaner and security. Find out how much is the maintenance charge, what is included and now included in the charge. For example, car parking charges may be separate.
If you have a car this must be an important question to ask. Will car parking be provided and do you have to pay extra for it?
Check with the seller of the apartment if his/ her parking slot will be made available to you. If you’re the previous owner did not have a vehicle, speak to the secretary of the society and ask for a parking slot.
You should be familiar with the process and understand both the pros and cons before taking on this large undertaking.
You should always know how much of an investment you can purchase. If you don't know how much a bank is willing to lend you, then you may end up wasting your time shopping for complexes that are too expensive. Getting pre-approved is helpful to you and your real estate agent.
You will need to take into account the rents that you hope to receive from each apartment. Also calculate the utilities and the amount you would put away for repairs and maintenance.
You will need to take into account the rents that you hope to receive from each apartment. Also calculate the utilities and the amount you would put away for repairs and maintenance.
Consider the following also as you make your list.
This would mean that you won't have to search for tenants. Find out from the owner how responsible the current tenants are. The eviction process is a long one, so don't get yourself into a bad situation.
The latter will mean that you will need financing for renovating the building unless you already have the funds available. If you do need to borrow the money, make sure that you can lucratively rent out the renovated apartments once the repairs are complete so you can start profiting on them.
This will affect your mortgage payments because you will be contributing more toward them. If you live offsite, you will then need to decide how close you want the apartment building to be to your home. If there is an emergency, you should be available to respond quickly. If not, then you need to partner with a management company. Another option would be to set up an account with a plumber, electrician and any other contractor who can be available should there be an issue in one of your apartments.
Try and get a referral from a friend or family member. An experienced realtor can guide you through the shopping and purchasing process. A trusted realtor can also tell you whether an apartment building is a good investment or not. You need to have a really great relationship with your realtor if you want to find the perfect apartment building for you. Make sure your realtor knows that you were pre-approved and pass on your list of expectations so that you are both on the same page when shopping apartment buildings.
There may be some back and forth between you and the seller. Only you can decide what you think is fair. You may not get the first property, but when you do finally settle on one that the seller agrees to sell to you, your pre-approval will help the process go faster.
You may be asked to submit further paperwork above and beyond what you gave the lender initially. Updated paperwork will be filed and an interest rate determined. Read everything before you agree to the loan, including the length of the mortgage, whether the rate is fixed or variable and your monthly payments.
You will have to sign a lot of paperwork. You may also have to hand in a check or money order for part of the closing costs if not all of it. Once everything is signed, you will be given the keys to your new apartment building.
Once your requirement is defined and you found right property, check the legal aspect of the property. Be sure that the developer has acquired approvals and No-Objection-Certificate (NOC) from the Municipal Corporation, Area Development Authorities, Electricity Boards, Water Supply & Sewage Boards and concerned authorities. Ensure that the developer has entered into proper development agreements and property has clear titles. Every bank conducts a legal check on your documents to validate their authenticity before sanctioning Home Loan. As a buyer, it gives you confidence that your property has been inspected by experts and your property is legally clear and technically sound.
