Six Steps to Buying an Apartment

So, you’ve decided to buy an apartment building. As an investment and a living space, an apartment building can be both a profitable venture and a great place to live. You can take the top floor and rent out lower floors at various prices, turning your home – which some may consider a liability – into an amazing asset.

While the upkeep of an apartment doesn’t make it an entirely passive form of income, it is a fairly good investment to make nonetheless. However, it can be a steep one as well. Whereas houses and condominiums are bought for a single family, an apartment building is always purchased with its qualities as a rentable space in mind. If you’re simply buying a single unit within an apartment building, then you are, in truth, buying a condominium.

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What sets apartments apart from condominiums is that condos are owned collectively by each unit owner, and thus spread around the cost of maintenance and upkeep. An apartment has one owner, which can be more profitable, but also more risky. If you’re up for it, however, you can find the apartment you’re looking for in just six simple steps.

1.) Decide What You Want to Buy

Location is incredibly important, more so because you’re not only looking for access to locations and places that are relevant to you and your own needs, but the needs of whoever is more likely to be your tenant. Buying an apartment building near a campus despite not being a student can help you net students as tenants – however, if you’d rather have older and more reliable tenants, then buying a building nearer to a residential area or office-heavy part of the city can net you more young workers, and potentially working couples. Amenities should also be considered. Does the building come with a Laundromat nearby or in its ground floor? Does it have viable parking spaces? Remember – even if it doesn’t apply to your needs, if it applies to the needs of a large renting demographic, you’re more likely to get applicants.

2.) Consider Your Financial Options

Buying an apartment, like any large property, can be aided through a loan. In that case, getting yourself pre-approved for one can help you narrow down the specifications of your budget. Alternatively, you can negotiate a lower down payment with the apartment owner by paying monthly mortgage installments for longer, and thus paying an ultimately higher price.

Alternatively, you can negotiate what’s called a lease-to- own. In this case, you pay rent for an agreed- upon amount of time, and then pay the price of the building. This allows you to live in the building while you save up the money you need to buy it, or build up your credit rating for a loan. If there is an existing mortgage on the building, one the owner hasn’t paid off yet, you can assume that mortgage and absorb its costs as your own. This, however, is usually only the case when the seller and owner cannot pay the mortgage of the building any longer and wants to transfer it to another entity or person to avoid foreclosure. If you come across someone looking to get rid of their apartment building by transferring an eligible mortgage onto you, you may have found yourself a good deal.

3.) Look Thoroughly

There are many, many, many apartment buildings out there, and each one is different in its own way. Before jumping on any deal that might seem great at first glance, it’s a good idea to spy around for one or two different options, just in case.

A great place to look for properties is the Internet – especially in Malaysia, where online growth has boomed from 15 percent to over 60 percent in a little over a decade according to Internet World Stats.Through extensive real estate directories such as Property Guru, you can have a more comprehensive idea of what an apartment for sale costs, what it would look like, and where you’re most likely to find one. However, don’t write off traditional classified ads just yet either. Looking in both paper and digital print ups your chances of finding a better deal.

4.) Get a Professional Opinion

A great way to ensure that you’re getting what you’re paying for is by asking a real estate expert. Contact a local realtor or real estate consultant to understand what kind of price range you should be working with, and what to expect. Taking a look at the national housing market can also help you build an idea of what the average price should look like, and it can help you avoid getting ripped off. For example – according to Global Property Guide, high-rise residential property prices are going up, albeit slower than per usual for Malaysia’s market.

5.) Speak With Your Lawyer

The single best idea before actually considering a contract for an apartment is running it by your lawyer. Property law can be tricky, and you don’t want to be making any mistakes. Once you know that your deal is legit, however, you’re free to go ahead and finalize it – and net yourself a great investment.