With so many New Developments being delivered in and around Sydney many of these new properties are being bought as investment properties, I’ve heard estimates of 200,000 new properties being completed this year alone.
It’s likely that this trend will continue, having been the first property manager to oversee the hand over, leasing and ongoing management of several new properties I thought it’d be useful to share my experiences of some common occurrences when buying new.
This is also a post that maybe a few of my clients would’ve liked to have come across before they had purchased, they’re Investment property off the plan or in a Newly completed building.
This isn’t to say in any way that they’ve made a bad decision but there are somethings that a developer or selling agent won’t tell you. I don’t sell so have nothing to lose!
Further to that, as a Property Manager it’s on us to foresee these issues where possible but some have been new and surprising, even to me.
NEW BUILDINGS MEAN, NEW…
A new building is not and never without some form of defect or defects but owners and agents will be provided with a guide on how to deal with these and they should be reported as soon as possible to the appropriate person.
New Buildings are increasingly improving their procedures and the information they provide at handover.
Defects can be anything from patchy paint work, doors that don’t line up, appliances not connected (it’s happened) leaks or any number of teething issues.
The first tenants will likely pick up on these as they start to settle in so it is crucial to make sure tenants are assured that you want these issues reported and as soon as possible so that these defects do not become the owner’s responsibility down the track.
Move ins (and outs)
Many newer buildings now require that tenants pre book they’re physical move in date along with a timeframe, some even require that tenants leave a deposit in case of any damage to common areas.
For the most part it’s to ensure that there aren’t an excessive number of move ins at any one time, or that the move will disturb other occupants. It also allows the building managers time to put up protection curtains within the elevators or assign a lift for the tenants use.
It’s also important to know if the building doesn’t allow moves over the weekend- have been caught out there, and never again. Weekends are tenants preferred move in dates so new tenants need to know well ahead of time and generally book well in advance is as they will decline requests where there are other bookings already set.
TIP: Make sure your agent has the appointed Strata Manager and/or Building Managers details so that they can obtain all the information they need.
Security keys, swipes and access cards are strictly limited in newer buildings where the aim is to really ensure the building is only accessed by those that need access. Definitely something to be mindful of if you have 3 Tenants, and your access limit is 3 security passes per apartment- this means no spare set available. See Costs sub-heading to follow!
Every building has its own set of By-Laws, these always need to be reviewed but especially within a new complex so things like I’ve mentioned above can be picked up.
New Properties should come with an Owners Guide which will include;
-Contacts for Developers, Builders, Strata and Building Managers
-Instructions relating to appliances and fittings
-Procedure for reporting issues, defects
Worthwhile sharing with your tenants as well!
You’ve paid for a brand-new property but are there hidden costs? Well there may be.
If you have more tenants on a lease than you have security keys these need to be provided to all tenants listed on the lease, some buildings limit how many they’ll issue to each property- that limit could be just at settlement or a limit imposed permanently.
With a new building, will come a New Development Charge if your tenant wants to be connected to the NBN. Currently $300.00, as to who’s responsibility it is to pay is highly debatable. While the lease will state it’s the tenant’s responsibility, a lot of advice on this leads to fact that owners “should” reimburse tenants as that connection will remain with the property long after the first tenants have moved.
Does your property come with Blinds?
A worthwhile question asking at the point of purchase or you’ll need to provide these for tenants and arrange them once you have possession. From my experience most New Developments don’t come with any window coverings.
Repairs are inevitable with all rental properties and one would think that with a new property there would be little to maintain, and you would be right as most repairs would come under defects so reporting these are crucial in the first weeks.
- & Look out for!
When doing your Pre-Settlement Inspection, which should be the time you’re looking for defects is to take a close look at the finished paint job.
Not only obvious patchy paint work but it’s sometimes obvious that new apartments are only given one undercoat and one coat of paint, you’ll be able to tell by the appearance and it is especially obvious on any internal door frames.
Have a feel of bench tops surfaces and floor boards, while everyone loves the look of raw materials in many cases, I’ve seen unsealed surfaces that are no good when it comes to every day spills and these materials will soak up stains. While the builders may not rectify this it’s something that should be detailed at the time of purchase, specifically materials and finishes. Whatever assurances or inclusions are promised- get it in writing!
TIP: Agents need to make sure that the Strata & Building Managers know who is managing the apartment and ahead of any tenants moving in. They need contacts in order to resolve any issues.
When a new building gets its final tick of approval, AKA an occupation certificate, new owners will rush to get their keys.
Then the individual properties will start to surface on the rental market and where the properties are all new and appearing online one after the other, pricing is everything.
Your pricing really will be based on how your property sits against the others. Is your floor plan more practical and spacious? Do you have a better aspect?
What I did in a recent situation was unashamedly attend the competitions inspections, being upfront about who I was of course to see where we sat compared to other properties and priced it accordingly.
Thinking as a tenant though, if you’re looking in a new building, you’re also likely to have a look at as many available properties as possible and they’re likely to have their pick based on preference.
TIP: If you’re paying for professional photography, have your photos watermarked with the agent’s logo- or it’ll be a free for all to use- at your expense.
Up Soon – I’ll cover some General Tips for Strata Buyers