Are Apartments Freehold?
In the most part in the Auckland CBD - Yes. There are however areas particularly adjacent to the waterfront which are NOT on Freehold land.
Are there Managers on site?
Many complexes do have live-in and/or on site management. If not there will often be a person responsible for attending the building on a regular basis.
Do I pay extra for these facilities?
Generally no. The free use of facilities is covered in the Bodycorp levy. There are some newer complexes where access to facilities is charged.
How many Apartments will there be in 2 years time ?
Given the demise of the finance sector we do not expect any further supply of new suites for some years.
What can I expect the outgoings to be on an Apartment ?
In addition to the normal monthly costs of Telephone, Power/Gas and Contents insurance, your outgoings will comprise of Annual Council Rates and Bodycorporate charges. Most will be familiar with Rates, as with suburban properties, all Apartments are levied annually by the Council based on a 3 yearly Council valuation. As for the Bodycorporate Levy, this is the Apartment's share of the total cost of running and maintaining the entire complex. There may also be an Annual Ground Rent levy if your Apartment is on Leasehold land.
What facilities do Apartment complexes have?
These can range from none at all, to facilities such as Gymnasiums, Swimming Pools (indoor/outdoor and sometimes heated), Spas and Saunas, Tennis courts and rooftop areas. Some more student-orientated blocks will also include communal laundry and cooking facilities.
What is a "Guaranteed Return"?
A Guaranteed Return is a promise from the operator to provide you with the stated income return on a regular agreed interval for the period of the Term signed up for. It is recommended you take legal advice in advance.[/list]
What is a Bodycorp levy?
This is the apportioned share your Apartment is calculated to contribute to the cost of running the entire complex. This will typically include Building Insurance, maintenance (often including providing for future works), lifts, facilities, looking after the upkeep of common areas and sometimes providing for an onsite Manager. Water is often included in the Annual Bodycorp levy and also occasionally Sky TV. Ask your Agent for clarification.
What is a Bodycorp?
A Bodycorporate (Bodycorp) comprises the owners of a Unit Title Apartment building. The Bodycorporate meets annually, its AGM, where budgets and administrative matters are discussed and voted upon. They will also appoint the onsite manager where that is applicable and oversee the day to day running of the complex. It is ultimately responsible for the maintenance and upkeep of the building. All Apartment owners become a part of the Bodycorporate membership and are invited to attend and contribute at Annual meetings. The administrative functions of the Bodycorporate are delegated to a Secretary who convenes the AGM, levies owners and pays the bills.
What is a Serviced Apartment?
These are Apartments in Hotel operated complexes. The Apartments are privately owned but typically leased back to the Hotel who provide the owner with a monthly income based on Hotel performance.
What is City Council Rates?
This is your contribution to the City Council to cover the services and facilities provided by them. The cost is calculated based on a Council valuation of the property. For further explanation see: Auckland City Council
What is Freehold vs Leasehold?
Freehold means the land on which the Apartments are built is owned and you have a share in that ownership. Leasehold means the land on which the complex resides is NOT owned outright but is leased (ie. rented) from the owner for an agreed term. There will be an annual rent associated with leasehold property. There are a number of different types of lease and you should request details from the Salesperson regarding Term, conditions, annual rent charges and rent review dates.
Where can I expect to find Leasehold property in the City?
Leasehold land is predominantly situated adjacent to and around the City waterfront area and some lower parts of Parnell and lower Anzac Ave.
Will I get a Carpark with an Apartment?
Many Apartments will include one or more secure basement Carpark(s). Many more however, do not. The smaller Studio units will most typically (although not exclusively) not include carparking.
How many Apartments are there in Auckland City ?
In 2009 there are 450 apartment buildings in the CBD comprising 24,000 suites and 110 complexes in the “City Circle” or near suburbs.
Are tenants easy to get?
There will, in our opinion, always be a demand for inner city living, whether it be for convenience, livestyle and/or employment/education related reasons. The demand will fluctuate depending on supply parameters at any point in time - please seek advice from experts in the market.
Can I have my Investment managed for me?
Yes, most definitely. Here in NZ, there is increasing interest regarding professionally managed property, following on overseas trends. With today's busy lifestyle, more investors are now seeking expert advice and management of their properties. At City Sales we take full responsibility for all aspects of managing your investment for you. You are kept fully informed at all times and receive, in addition to your monthly income cheque, regular updates on market conditions and trends in this complex ecosystem called the Auckland CBD.
How can I get to know and understand the Apartment market?
Speak to someone who specialises in the City Apartment market. It is a neighbourhood of it's own and does not behave or react as other markets do.
How do I know I am not buying a leaky Apartment?
The Agent dealing with the property is required to disclose to you, any information he/she is in possession of which you should know about. In addition, we strongly advise you to request a copy of the latest (and perhaps earlier also) Bodycorp meeting minutes and specify a condition on any contract that it be subject to the results of a building inspection.
How do I work out the return on my Investment?
To work out the Gross Return - Divide the expected Gross Annual income by the Purchase price and multiply by 100. A more realistic assessment is to calculate your NET return. To do this, subtract the annual outgoings (Rates, Bodycorp, Ground rent etc), from the expected Gross Annual income and use this in the calculation.
Should I buy "Off the Plans" and what should I be wary of?
Watch out for Developers selling their own product. You have limited comeback if you are not buying through a Licensed Real Estate Agent. Beware of Display Suites - ensure these are built to scale and check thoroughly the dimensions of the unit you are interested in, in comparison. Clarify what the floor area quoted encompasses - balconies and outdoor areas are sometimes included. Check surrounding areas for future developments that may affect your purchase. The City Council will provide relevant information. Ask for information regarding the Construction company, their track record and any warranties that may be associated with the building. Ask who the Bodycorporate is going to be and what other buildings they currently manage. Beware of rental guarantees - these are often used to inflate the price. Seek legal advice before signing contracts.
What do I need to know if buying at Auction?
Buying at Auction is an unconditional purchase. 10% of the buy price is expected immediately with the balance at settlement date. Clarify any GST implications before bidding - especially in the case of Apartments being sold in 'Hotel Leases'. Due diligence on your part in regards to Title and other aspects is your responsibility prior to the day. Listen carefully to the Auctioneer to determine if Vendor bids will be allowable. There is normally a RESERVE set by the Vendor, below which the property will not be sold. This is confidential to the Auctioneer and the Real Estate Agent and will not be disclosed to bidders. It may become evident if the property goes 'on the market' during the Auction, at which point the property is now definitely going to be sold to the highest bidder.
When buying an Apartment, what do I have to look out for?
Future developments - check adjacent potential sites. If leasehold - the Lease Contract details and term including when rent renewals are due. Ask about tenancies and owner occupier rates in the building. Is there an onsite manager. What facilities are included. Check the carparking if that is included. What security is there and how does it work. Who runs the Bodycorp and what other buildings do they administer. Is there a sinking fund proviso. What are the Annual outgoings. If in a Hotel complex, check thoroughly the Lease contract. What chattels if any will be included.
Can I sell privately?
Yes, most definitely. You are however, exposing your property to a limited buyer market. Real Estate Apartment professionals however, are not only constantly working with an extensive buyer pool, they are trained to negotiate the best possible price on your behalf and you will, in most cases, be compensated for the fee involved.
How do I choose the best Real Estate Agency?
Look for, and in fact, demand, they can show an intimate knowledge of the CBD Apartment market in general and, as important, a knowledge and history of sales in your building and surrounding complexes. The City Apartment market, with it's complex nature in regards to combinations of Hotel leases, pooling arrangements, lease variations and termination clauses, along with serious legal and GST implications for vendors and purchasers, requires an expert knowledge of, and a proven track record in, the central city Apartment ecosystem.
If I don't choose Auction - how long will it take to sell?
The time it will take to sell depends on three main factors: Access to the property. How well it is priced. Exposure/marketing. If the property is positioned accurately in regards to each of the above and given there is a willing buyer and a willing seller, we would expect your Apartment to sell well within the term of a standard Sole Agency tenure.
Should I Auction my Apartment and why?
'Sale by Auction' provides you, the Vendor with significant benefits. These include: Major exposure for your property by way of a professional, tailored marketing programme. Your unit becomes the 'focus' in the complex and often essentially halts other activity. Interest generated creates competition and an 'urgency' to act, amongst buyers. Auction day creates a crisis, focal point and sense of finality for buyers and promotes decision making. The result for you is an unconditional contract, peace of mind that your property has sold. You should expect the Real Estate Agency to provide you with evidence of their proficiency to conduct an Auction programme, in this market specifically, as well as provide you with a comprehensive Auction record of past performance.
Should I pay for marketing and if so how much should I expect to contribute?
A major component of any marketing campaign, for any product, is EXPOSURE. This is most definitely true in the CBD Apartment environment. In this, mainly, investor driven community of prospective purchasers, it is essential your Apartment is elevated and promoted 'up front' in what is fundamentally a commodity market. The chances of a quick result are enhanced substantially by a planned and tailored marketing programme. It is widely accepted that a 1% to 1.5% (of expected sale price) marketing contribution will provide an acceptable result. This may need to be increased for a 'Sale by Auction/Tender' programme.
What are the advantages and otherwise of both?
General Agency With more than one agency working your property there is therefore the prospect of an extended pool of buyers. Your ability to sell privately is also a bonus. It is likely however, your property will not receive the marketing exposure (unless paid for by you), or the focus, it deserves, by any one of the agencies involved on account of the fact that at any point in time, the property might be sold by any other agency, or in fact, by you yourself. Sole Agency Armed with the knowledge that they have full control, and are solely responsible for the sale of your Apartment, your elected Agency should promote your property fully to the extended public, as well as to it's own pool of prospective buyers, an exercise which can be assisted greatly with the injection of some marketing contribution from yourself, the Vendor. Not only is there a greater responsibility with a Sole Agency, there is also an increased accountability to you, the employer which means, all things being equal, a quicker and more satisfactory result for you.
What do I need to consider before putting my Apartment on the market?
Access to the property for the Real Estate Agency is a major consideration in the CBD Apartment environment. Between tenancies is an optimum time to market your Apartment. If tenanted, you might consider, as compensation for providing reasonable access and keeping the unit tidy, a reduction in rental for the tenant for the period of the sale. As for the sale of any property, presentation is important.
What is a General Agency and what is a Sole Agency?
General Agency An arrangement to sell your property with usually two or more Real Estate Agencies. You can invite additional Agencies to help you sell at any time and you are also able to sell your property privately without incurring any agency fees. Sole Agency An exclusive and binding contract with a single Real Estate Agency, for a specific period of time, to market and sell the property on your behalf.