How to find a cheap apartment

An apartment is a great option for a first home, but which one is right for you? Picture: Getty

The idea of trading a backyard for a balcony is no longer foreign to Australians, with house hunters across the country, especially first-home buyers, now viewing apartments as a viable option. But how do you find a cheap one?

Michael Yardney, director of Metropole Property Strategists, says while it’s important to get a foot on the property ladder, buyers need to be realistic about what they can afford, go for smaller, older properties and not get dazzled by shiny, new apartments.

“Very few people can afford their dream home, or anything like their dream home, first up, even when buying an apartment, so buyers, first-home buyers in particular, need to think about the property they’re buying today as a stepping stone towards the future.

Owner-occupiers need to think like investors.

“Even if you want to live in the property for a number of years, you never know what the future holds. You need to understand the property is the first step in your wealth creation strategy for the rest of your life,” Yardney says.

Find a flat that needs a facelift

The secret to getting the right apartment, at the right price, is to start small and go for a “renovators’ delight” in a good location with growth potential, Yardney says.

“Start small, something you can comfortably afford and then build equity through giving it a facelift.

“Definitely don’t buy something slick and perfect. Put simply, you pay a premium for all that to be done for you. Ignore the ‘yuck factor’ and buy a renovators’ delight you can do work on at the weekends to improve and drive up the value,” Yardney says.

Location, location

Location matters when buying an apartment, just as it would for a house purchase. Picture: Getty Images

With 80% of a property’s future performance related to its location and 20% linked to the property itself, the importance of location can’t be overstated, he says.

In cities, buyers should generally look within a 15km radius from the CBD, but not in the CBD. Always go for a cheaper house in a better location – not vice versa.

“If you buy a more rundown property in a good location, the location will drag the value up,” Yardney says.

Look for suburbs undergoing gentrification, or those nearby, to cash in on the ripple effect. Avoid areas with clear oversupply.

“I would go for what used to be called a flat, a ‘walk-up’ block with two or three flats, in a good neighbourhood in that inner to middle ring, 2km-15km from the CBD.

“There was a lot of them built in the 1960s and 70s. You want to be somewhere that the local town planning rules don’t allow for a high-rise next door, to maintain scarcity,” Yardney says.

Proximity to transport will become increasingly important as Australia’s population continues to grow, Yardney says. A decent-sized balcony and some outdoor space are also important.