Worst Mistake When Buying Condo
What is the worst mistake when buying a condo? Are you committing this costly mistake?
📌 Are you buying for your own-use or for investment?
Many commit the mistake of using their own personal preferences to decide when buying for investment. The truth is, your preferences matter less when you buy for investment. More important factors are:
- Low entry point
- What you tenants may like
For investment, it is OK to get the cheapest units. Usually found on low floors with little or no views. Tenants are unlikely to be willing to pay significantly more rent for a higher floor unit with better views which would have cost much more to purchase.
You should also avoid first-floor patio units, a penthouse with a high ceiling, or an open terrace. I call them lifestyle units. Resale demand is usually smaller for these units & may take a longer time to sell than a regular unit
Also, beware of our parents, “those were the days” factors. They are usually our consultants or will sponsor some funds for the purchase. Our parents are used to big-sized layouts and will complain about, “Here small, there small…”, even though you are not buying to stay.
To understand why our parents feel that way, let’s do a layout flashback to the 80s.
📌 Layout flashback
In the 80s & 90s, a helper’s room with windows, a yard, a backdoor in the kitchen are common. For example, let’s take a look at this 2 bedroom at the Bayshore which TOP in 1999. It is about 1100 sqft.
In the 2000s, big balconies and long bay windows are common. In 2010s, open kitchen concepts plus induction cookers are common.
Until recently, 2 bedrooms with 1 bath are popular, and 3 bedrooms come in a compact 900+sqft. The fact is, the per-square-foot price is increasing. Developers reduce the sizes of the units and provide more efficient layouts, to make the quantum affordable. Otherwise, the prices will be too high.
So avoid this worst mistake when buying condo for investment. It is important to consider what your tenants like more than what you like when buying for investment.
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