You’ve probably heard friends, family, and coworkers gush about how they’re so happy they bought that apartment last year. They can walk to work, take nice walks in the park or hit up a bar without having to drive anywhere. You’re jealous. Now you’re itching to get in on the action. But buying an apartment seems like a pretty big endeavor for your first home purchase…right? Not necessarily! Buying an apartment is a totally reasonable thing for first-time homebuyers to do — you just need a little guidance on how to make it happen. As someone who has navigated this process twice now, let me assure you that it’s not as scary as it may seem at first glance. Purchasing an apartment isn’t that different from buying any other home — you just have to be aware of what’s out there and ready to jump on opportunities when they arise. With some preparation and planning ahead of time, buying an apartment can be a very enjoyable process with minimal stress involved. Let’s take a look at the 5-step guide to buying an apartment so you can feel confident trying this new housing option when the time is right for you.
Step 1: Research Your Apartment Options
The first step to buying an apartment is to do your research on the apartment options in your area. You can start with these questions: Are you looking to buy na apartment or townhouse? How many bedrooms and bathrooms do you need? What type of floor plan are you looking for (i.e. open concept, gated community, etc.)? How many units are in the building you’re considering? What kind of neighborhood do you want to be in? Some of this may feel overwhelming at first, but don’t worry — you have plenty of time. That said, the sooner you can start gathering this information, the better. You’ll want to be aware of any new developments in your area, information about new buildings going up, or any other apartment options that suddenly become available that may fit your needs.
Step 2: Estimate Your Monthly Housing Budget
Now that you’ve got a better idea of what’s out there, it’s time to estimate your monthly housing budget. While this step may seem like it’s coming a bit out of left field, it’s actually very important. It’s easy to get caught up in the excitement of buying a new place and forget about your budget. It’s important to know how much you can reasonably afford to spend on rent each month, and factor that into your budget so you don’t go over. Again, this will depend on your individual situation. If you’re a single person, you’ll obviously be able to spend less than someone who has a family of four. You can use this rent calculator to help you get a better idea of how much different apartments in your area would cost.
Step 3: Determine How Much You Can Afford to Spend
Now that you know how much you can reasonably afford to spend on rent each month, it’s time to do a little math. The general rule of thumb is to save at least 5-10% of the purchase price of the apartment you’re buying before you jump in. You’ll also have to factor in closing costs and other miscellaneous expenses that may come up. Once you have those two things, you can use a mortgage calculator to figure out how much you can afford to put down on your apartment. This will help you know how much you’ll need to save in order to make this purchase happen. Keep in mind, though, that it can take a while to save up a deposit. So don’t wait until the last minute to save for this purchase.
Step 4: Know Your Strata Costs
Strata costs are just one of the many expenses you’ll need to factor in when buying an apartment. They’re quarlertly fees paid by owners to cover things like property taxes, utilities, landscaping, and building repairs. These fees vary based on the price of your apartment and can add up to several hundred to several thousand dollars each quarter. There are a few things you can do to lower your strata costs: This is often a requirement when you buy your first apartment. – Attend board meetings and vote on the priorities for your building. – Ask your current board for advice on how to lower your strata costs. They’ll likely be happy to help you out.
Step 5: Get Pre Approved
Once you’ve gotten a better idea of what’s out there, estimated your monthly housing budget, and figured out how much you can afford to spend on your new apartment, it’s time to get pre approved for a mortgage. This will let you know just how much you can afford to spend on your new apartment. It will also give you a better idea of what type of apartment you can afford based on your income and savings. Make sure you’re working with a reputable mortgage lender to get the best rate and terms possible. You can also get pre-approved through mortgage brokers like Portfolio Pro we will give you a good idea of what you can afford and what your monthly payments would be, as well as help you find the best rates.
Buying an apartment isn’t for everyone, but it’s a viable housing option for a lot of people. It can be a great way to build equity and gain independence, but it does require a bit of research and budgeting on your part. With the right amount of research and planning, you can buy an apartment without a hitch.