What you should pay attention to when buying a condominium
You have decided to buy a condominium. Whether you want to move in yourself or buy the apartment as an investment and rent it out, it’s important to consider a few points before you buy. Use the ten most important points we have compiled for you to create a checklist for yourself. We’ll also show you the five most common buying mistakes so you can avoid them at all costs.
It goes without saying that you cannot think of all the important points at the same time. Create a checklist on which you summarize all the points that are important to you for the purchase and work through them before you sign the purchase contract.
Pay attention to the location of the apartment!
Probably one of the most important tips for buying an apartment: pay attention to the location, because that is pretty much the only unchangeable aspect about a property. The apartment itself can be renovated, painted and modernized, a house can be energetically insulated, extended and perhaps even added to. But the location remains the same: Quality and location complement each other.
Those who have children, for example, will appreciate a daycare center, a school, perhaps also playgrounds, sports clubs or the pediatrician nearby, depending on their age. The retiree who loves nature will value different things in his or her neighborhood than the young professional who wants a quick subway connection or a gym on the doorstep instead. Think about what view you want to enjoy, if you need a balcony or terrace. Or what you don’t want to enjoy – not everyone feels comfortable in front of a noisy highway or in the flight path of an airport.
Visit the apartment before buying!
Before buying a condominium, you should have seen it live at least once. This may sound banal, but there are investors who do not follow this rule. Pictures and brochures can help you, but they are no substitute for a viewing. Only when you are there in person can you properly assess the furnishings, the condition and the environment of the apartment. Look very carefully: as a potential owner, you should look at those sides of the property that are not necessarily in the exposé and in the spotlight, e.g. basement rooms and attic, possibly outbuildings and garages. As a matter of principle, do not shy away from probing questions or critical glances.
Inform also about the surrounding field!
You should also consider the reputation of the neighborhood or street in which an apartment is located. It is often decisive for the value development. To be able to assess the image of a location, you need local knowledge or an expert who can give you competent advice. Especially in a foreign city where you are not familiar with the area, questions about the surroundings are often difficult to answer without external input.
Interview residents and other tenants!
Talk to current residents when you visit a property! They can give you first-hand information about the condition of the property and its location. If many condominiums have been purchased for owner-occupancy in an apartment building, this speaks well for the location and the property. Even more so, of course, if many residents have lived in the house for a long time. To inquire with other owners or with the tenants (independently of the salesman or broker) is worthwhile, because their information is often more objective and closer to reality than the representations of the broker. Which does not mean that you should not also bug the broker with questions. What he doesn’t know, he has to find out. But that’s not all: Especially when viewing a property that “fits” at first glance, euphoria is not advisable, because it is a bad advisor and can drive up the price.
Check the rental prices!
If you want to rent out the apartment, you should find out about the current rent index and any rent caps. If there are caps on rent increases, you should know about them. When buying the condominium as an investment, it is useful to put yourself in the role of the future tenant. After all, it is only through his rent payment that you can earn a return.
Read the minutes of the last owners’ meetings!
With a condominium you acquire only a part of the house. However, many areas, such as the roof, staircase and the exterior facade, belong to the community. Check the minutes of the last owners’ meetings to see if there are any plans for extensive work on the building in which you would have to participate. A look at the minutes will of course also tell you something about the relationship between the condominium owners.
Do not forget the incidental acquisition costs!
The notary costs and the amount of the real estate transfer tax should also be included in the comparison. Calculate with realistic values. When buying, you should know the amount of the housing subsidy that you have to pay as the owner and how high the maintenance reserve and the administrator’s costs are.
Compare several financing options!
If you decide on financing, you should pay attention not only to the interest rate, but also to the length of the fixed-interest period. The possibility of unscheduled repayments should also be examined.
Compare different financing offers – it’s your money you’re spending on the new condominium, regardless of whether you’re using equity or a loan. It’s also worth thinking about follow-on financing. So don’t be lax about where to look closely.
Have all contracts checked by an expert!
You should get advice from an expert who can answer all your questions about your purchase. Have the purchase contract sent to you in good time and, if necessary, have it checked by a lawyer. The land register entry should also be checked before you sign the purchase contract. You need to be aware of all the details of your purchase.
Avoid the most common mistakes
Whether for retirement, as a potential inflation hedge or as a precaution against rising prices and rents – buying a home is popular. But not every real estate purchase is successful. Some people make a purchase that they regret afterwards. We give you tips and point out the five most common mistakes so that your investment in your own home will be a success.
Mistake 1: No viewing
Never buy a condominium without having inspected it! Only if you have been there yourself can you correctly assess the properties of the apartment. An apartment inspection also gives you an impression not only of the actual apartment, but also of the surroundings. Already the sight of the facade, the entrance area and the staircase give you information about the environment and also about the house community.
Mistake 2: Not checking the documents
Do not sign a purchase contract before you have checked all important documents. Care should be taken when reviewing the documents. Check all the documents required for the purchase, such as the property tax assessment, living space calculation, declaration of division, house rules, collection of resolutions and building file for completeness. The allocation of special rights of use to attic, basement rooms and parking spaces should also be clarified.
To avoid any unpleasant surprises, check whether there are any encumbrances in the land register that could be transferred to you as the buyer. Also important when buying an apartment: take a look at the minutes of the owners’ meeting. Check whether there are any costly repairs to be made and how high the maintenance reserve is. You can also find out from these minutes whether there have been any disputes between the owners in the past. This can also be informative, after all, you will have to come to an agreement with them at the owners’ meeting in the future.
Mistake 3: No appraisal before buying the apartment
Get a value appraisal to avoid paying an overpriced price for your condo. Not everyone can know their way around everywhere – so if you don’t have expert knowledge of the real estate market in the city you’re buying a condo in, get a market value appraisal from an expert or a fair market value appraisal.
Mistake 4: Not checking existing contracts
Especially if you are buying an apartment as an investment and want to rent it out in the future, you should check the existing contracts. After all, the success of your investment stands and falls with the rental income. In addition to any existing leases, analyze vacancies and tenant turnover in the building and surrounding area. Be sure to clarify how high the actual net cold rent is and whether you can also achieve this in the long term.
Mistake 5: No time
Be sure to follow your gut feeling and don’t make a hasty decision! Buying an apartment is a big step and you should take the time to analyze all the important facts and documents. Of course, you can’t put off the decision forever. Nevertheless, deal with all aspects in detail and don’t sign a contract until you are 100 percent sure. A careful examination can thus avoid a wrong purchase.
With these tips for buying an apartment, nothing stands in the way of your investment!