Buying an apartment for my child during university.
If you have the means this is a huge advantage for your child and can be an investment with great returns for your future.
A big factor to consider is the size and location of the apartment and it needs to more than 45sqm, this is due to the fact that when it comes to selling, many of the buyers are going to be first homebuyers. There will be many more buyers who will be owner occupiers.
Having a carpark if your apartment is on the city fringes will aid in your sell too.
This is a great way to not only aid your child in going to university as well as making an investment which will have a gain in returns in the future.
Good day, Andrew Murray here from the Apartment Specialists. Today, We'll be talking about empty nesters. Buying an apartment for your student, your son, or your daughter when they go to university. This is something I can actually talk from personal experience. I was lucky enough to have my parents purchase an apartment when I was at Auckland University. Yes, I finished my degree and it was just down the road.
It gave me a huge advantage, because I didn't have to be involved in the whole trying to find a place. It is a huge battle that students have at the moment. And probably most importantly, the big nights that obviously involved alcohol when you were a student. I'm 35 now but it meant I actually got to class, shall we say. If I was back at Mum and Dad's house, the drive in may have been less likely, shall we say.
But the most important thing is one of my father's, and I should say father and mother's best property purchases they'd done. They bought it a little while ago now. It's almost doubled in value. It has been cash-flow positive ever since. In fact, the return now is fantastic, but the key is, when looking for an apartment for your son and daughter when they're at university is - about size.
You've got to think about why are you buying it? As an investment to help them? You could be giving it to them to help them on the property ladder. I wish I was so lucky, but that may be the case. You've got to be thinking, "What's going to increase in value?" And that comes down to size and location. So, you've got to be thinking that this apartment that you are buying for your kids to use, it's got to be above 45 square metres.
Why? Because it's about the banks. You want to be able to sell this apartment in the future to owner-occupiers, because that's what's happening with apartments. It's going to be people's first home and it's becoming people's first home, and that's why it's all in the papers and the Prime Minister's talking about it. So the key thing is do not go below 45 square metres, because then you're dealing in the investment area where the value of the apartment is very reliant.
These rent values can fluctuate especially with new smaller apartments coming onto the market. So make sure you stay above that 45, ideally 50 square metres, and think about who you're going to be selling it to in the future. Obviously, location's important. If you're outside the CBD and still in the fringes, make sure it has a car park. That is also crucial.
I hope that helps, but just to sum it up. It's all about size and location, but the big one is just thinking in your mind, "In the future, I want to be able to sell this to an owner-occupier." That's where your capital gain will be, because it's an emotional purchase as well as having when they're not in there, having quality tenants, not students.
Anyway, hope that helps. Andrew Murray, Apartment Specialists.
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