Pros and cons of purchasing a character apartment
Character apartment pros: unique, high stud, less facilities equal less Body Corporate fess, low maintenance, solid, ability to renovate and make homely.
Character apartment cons: Low earthquake ratings, often have been converted from a building designed for something else, lack of carparks.
There are many pros of character apartments. They are timeless and all unique, they will never be built the same again. Most true character apartments ceiling are high stud which gives the illusion of more space and a bigger floor area. Most character buildings don’t have the facilities like a pool or a gym, this is a pro as they facilities are often unused but increase the cost of the Body Corporate fees. Character buildings are built well and this often means the maintenance and the likelihood of major works are low. With character apartments being all individual and effort allows you the autonomy to renovate how you please and make your home.
The main concerns when buying a character apartment is the low earthquake ratings. Anything about 34% is pass and means the likelihood of problems is low. Many character apartments have been converted to apartment and the building was originally designed for another reason. This is not the issue, but additions made after the conversion can be problematic if they weren’t done to high standard and properly.
With all this said, don’t let this deter you from purchasing in a character building. With thorough due diligence they are a fantastic investment.
Andrew Murray from the Apartment Specialists, talking about character apartments, the pros and the cons; though I personally own character apartments and have sold hundreds of character apartments and I personally love them.
First, we start with the pros and that is supply. There simply aren't any more being built; and even if a developer wanted to build them, they couldn't because they are just simply too expensive. We all know that with supply and demand, if you're not having more supply, well obviously the values long term is going to go upwards.
Number two, high stud. A lot of character apartments have higher ceilings than normal - nearly all of them. And that makes the apartment feel bigger. That small area of say 70 square metres feels 90 square metres because you've got a three metre stud. Design is another big one, because if you look at these new buildings now, in ten years and time, they become dated. Just look at something like say Key West, down at the bottom of Albert Street. It's starting to look dated and once upon a time, that was one of the most premium apartment buildings around.
If you have an apartment complex that's built with a, say futuristic design, they age the most. But character, they just simply always look good.
Number four, facilities. They don't usually come with a pool and a gym which nobody uses so you don't have to experience costs and maintenance around that area.
Number five, maintenance. Now, if the conversion was done properly and you don't have any issues; they've been around for 60, 70, 80, 100 years. They've stood the test of time and there isn't the same amount of maintenance needed in most cases.
Now, the other one is why some people love character apartments? It's simply your own canvas. The potential when it comes through innovation is huge. It's not like this sort of carbon copy approach, which is done with mirror apartments, where every single apartment of that configuration is the same on every single level. With a character apartment, you can look at each one and its completely different, and you can make it a home.
Now, for the most important thing of this podcast, it is the other cons.
Number one, you've all heard about it - its earthquake ratings. Now, the pass is 34%. 33% with a character apartment is a fail.
Often I hear agents saying, "They're going to change. This is a character apartment and they're going to lower it." It's not going to happen. I've spoken to a lot of experts about this and structural engineers. They put that in place for the safety of the people, so they're not going to lower it. And the thing is, when we come to strengthen a building, it comes at a huge cost. So no matter how attractive that character appeal is of that apartment, learn to be able to walk away when there's a low earthquake rating. The other one is what I mentioned just before, conversions.
Most of these character apartments were not initially character apartments. They were just character buildings and they could have been used for office blocks - and all kinds of reasons. I came across one the other day that was used for a dog pound. Now, when they we're turned into apartments, some of them had extra floors added that were modern, or extra decks - often that were done incorrectly. A lot of them were done in the 90s, and you've got huge problems with a lot of character apartments with the additions that were made later.
If there had been additions made, make sure you check them out thoroughly and make sure there are no issues there. If not, absolutely fine. The other one is a lot of them don't have car parks and that really frustrates me, especially if you're an owner-occupier. Their location is really important to make sure that car parking is available. Because people, whether we like it or not, are still bound to our cars; and until our public transport system really improves - which is a big ask - it's really important. So that hurts yourself when you're living in it and when you go to sell that property.
If you don't have parking options around, it can hurt the sale price. And then the last one is numbers. So, if there are major costs involved or strengthening, or any issues, or maybe the windows need to be replaced because they've been there for seventy years. Often, the character apartment buildings, there are fewer apartments because one thing, which I didn't add, is that most character apartments are large and the buildings aren't 30 stories high, obviously, so there are fewer apartments. When there are fewer apartments, there's less apartments to share a cost. If there are major works that need to be done, then the costs are often greater per owner.
Anyway, hope that helps. Character apartments, absolutely love them. If you do the right due diligence, you can't go wrong. Hope that helps. Cheers.
Andrew Murray, Apartment Specialists.