Bought from ‘bleeding’ investors.
As virgin investors, we bought a one-bedroom apartment (35 sq m) in the heart of Auckland City in late 2005, financed via equity in our own home.
The first owners of our apartment lost at least $50,000. They were Australians who bought the place off-the-plans and appeared to treat the deal with little thought, (furnished a new unit with old stinky appliances, furniture etc, and relied solely on a agent to rent it).
We, too, first listed with an agency, however after two worrying weeks of no response, decided to try our luck on trademe ourselves.
I was amazed by the reaction, and (after getting rid of the agent), by the end of the week we signed a tenant for one year, they later extended this for another 6 months. These tenants have only just moved out, and once again we had no problem securing replacements.
I periodically check the sale price of units similar to ours in the same complex. At last inspection, I found them listed for at least $20,000 over what we paid, (although, considering transaction costs, commission etc, we would probably break even if we sold now).
Given the ease with which we have secured tenants to date, we intend to simply hold on to it. I believe, in time, first-home buyers will start to enter the market. Personally I would prefer to live in a city apartment, rather than a dumpy house in a dodgy suburb.
Financially speaking, the place has almost maintained itself, the cost of the loan is exceeded by approximately $70 in rent a week, and although this is eaten up by rates, and body corp fees etc, the tax benefits have been worthwhile.
To summarise, I remain positive about our apartment experience thus far.
To anyone thinking about it, my advice would be to: get a place with a view, check the body corp minutes before purchase, try and buy in an established complex, don’t solely rely on an agent to rent the place, don’t settle close to Christmas, and buy low whilst the bad press remains!
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