I find myself having numerous conversations about the Belfast property market, as you can imagine.
Most folks consider the purchase of property to be a relatively solid and traditional investment, and speak of “putting money into bricks and mortar” – and that phrase popped into my head during my latest property chat.
A prospective buyer dropped me an email – someone who’d read most of our recent articles and was keen for my take on the flat he wanted to buy in the impressive Arc Building in Belfast’s burgeoning Titanic Quarter.
He duly arrived at the office the next morning, and what’s more, he was bearing coffee! So we had a proper chat about what he wanted from the purchase and worked through some options.
It reminded me that these city-centre apartment complexes offer popular, attractive, and potentially very lucrative properties… but a smart investor will do a bit of homework first.
Although it sounds odd, you’re not literally buying “bricks and mortar” by purchasing an apartment in one of these schemes. You are purchasing the interior space of the apartment.
Upkeep, maintenance and insurance for all the shared areas of the building become the shared responsibility of all the owners – including you.
So, by buying an apartment, you automatically become a shareholder in the management company, with shared rights and responsibilities.
You automatically become a shareholder in the management company, with shared rights and responsibilities.
A management agency - appointed by the management company - will usually look after:
You’ll contribute to the work by way of a service charge payment, and have the right to attend and vote at meetings. You’ll typically be expected to hold a post such as company secretary or treasurer at some stage in your ownership.
For this reason, I’d argue it’s essential to find out certain pieces of key information before you consider buying a property like this.
The key question you need to answer when considering a purchase like this is “Is the management agency any good?”
Do they do everything they’re meant to do in that list above, and do it in a timely manner? Are they managing those service charge payments (your money!) responsibly? Do they make sure everyone pays their fair share, so those insurance payments, roof repairs and garden upkeep (that you’ve already dutifully paid for!) actually gets done?
Don’t be afraid to knock doors and quiz your potential neighbours.
There are some fabulous management agencies operating in Belfast – for example, under the able stewardship of Sonia Millar, the team at CSM Estate Agents and Property Management are worth their salt.
I would suggest your first research port of call is Companies House. Visit https://beta.companieshouse.gov.uk/ to search. Click on the company name, and select the ‘Filing history’ tab to have a look at all the accounting information they have submitted to HMRC.
Even if you’re no accounting whizz, you’ll be able to spot from their balance sheets what loans they have taken out, how much money is in the bank, whether they have valuable assets.
Their solvency should inform your decision.
Next – get your hands on a copy of the minutes from the latest shareholder meeting. By law, they must keep an accurate and fair record of meetings, so these notes can paint a revealing picture.
If you’re buying an apartment to rent out to a tenant, keep in mind the unique dynamic in this type of building.
As mentioned before, the inside of the flat belongs to you – outside, there will be certain rules and responsibilities.
Scrutinise these in your contract; it’s not unusual for apartment owners to be subject to very specific regulations – for example, colour of curtains visible from the front of the building, or for satellite dishes and drying laundry on balconies to be banned – anything spoiling the look of the complex.
We’ve also noted recently a blanket ban in some schemes on renting apartments out on Air B n B. (We are not saying any of these rules apply to The Arc, they are just examples of potential restrictions in this type of development.)
You’ll have to abide by these restrictions to live there - so they’re things you’d be responsible for enforcing with a tenant.
Asking price: £249,950
Monthly rent: £1,100
Agent: Simon Brien Residential
Asking price: £134,950
Monthly rent: £700
Investment involves risk and the value of capital and the income derived from it may go up as well as down. Past performance is no guide to future performance. Unless otherwise stated, the views expressed here are those of The Belfast Property Blog. Nothing in this article should be regarded as advice, it has no regard for the requirements of any particular person.