buying an apartment

Buying Your First Apartment-What You Need To Know

While purchasing an apartment is exciting, you must consider various factors to make a prudent and responsible decision. Furthermore, this could easily be your largest investment, making it vital to have a plan before shopping for a new place.

Similar to other investments, you must do your homework, establish the amount you’re ready to invest, and what you hope to achieve from the experience. If you don’t know what to look for, this checklist will prove valuable.

The Amount You Wish to Pay

Consider seeing a loan officer to obtain prequalification for a mortgage loan. The loan officer will inquire about your debts, income, and help you establish the amount you can afford. You can then spend some time reflecting on what you want your life to look like after purchasing your apartment.

You should consider whether you would want sufficient money to travel or whether you plan to start a family in the future. Bear in mind that if you intend to purchase less apartment than what your budget can afford, you’ll have funds left for other expenses.

Market Value

Before you purchase, it’s important you research the market to ensure you’re obtaining value for money. Consider talking to real estate agents and independent valuers while checking current sales in the area.

Don’t depend on the developer or the agent’s advice. This is especially important if you’re purchasing off the plans. You want to verify that the finished apartment’s value will at least mirror what you paid.

The Right Building

The easiest way to locate property is through a real estate agent. Alternatively, you can examine local papers for buildings on sale. You should also talk to community investors since properties frequently sell through word of mouth without advertising.

It’s also important you contact real estate lawyers locally to establish whether they’re aware of any properties on the market. While you’ll have to pay the agent’s fee, an agent’s market know-how and experience is incredibly valuable for a first-time buyer.

An agent could also suggest local property management firms. Remember, selecting buildings and vetting should be a business decision, so don’t rely on your emotions.

Neighborhood

While it’s crucial to like the building in which you’ll spend most of your time in the future, it’s equally vital to know your neighborhood.

The failure to pay keen attention to this detail could possibly lead to disappointment after you move in. Therefore, you should take note of elements such as area traffic and security.

Parking Situation

Naturally, you’ll want to park your vehicle in front of your apartment or at least nearby, so investigate the parking situation in that area.

Perhaps you could even rent a space. However, if you discover it’s an overcrowded area where residents have to park blocks away, perhaps you should consider other options.

Financing

Most lenders expect at least 20% down payment. However, loans vary, so shop around. The two kinds of investment loans are:

  • Non-recourse loan

These apply to properties that are over $2.5 million. Bear in mind that collateral is the property itself (or at times another specific property). If you don’t make timely payments, the lender will claim the property in question.

  • Recourse Loan

With this kind of loan, you’ll be personally responsible if you don’t fulfill your loan payments.

Final Thoughts

Purchasing an apartment is a major decision since you’ll probably live there for an extended period. Therefore, it’s vital you consider all the significant factors before investing.

For more information on buying your first apartment, contact us at Apartment Agents or leave a comment.