Over the last decade, Colombo City has been rapidly building upwards with the supply and demand of apartments being on the rise. The building boom that is underway in various parts of the city foretells a new era of a city living culture. As the cosmopolitan lifestyle trend develops in Colombo – with luxury shopping, diverse cuisine and plenty of entertainment – the lure to live in the city has never been more appealing. International attention has turned our way with billions in investments entering our shores, clearly indicative of an emerging market in trade and commerce. Those in the know of this potential investment opportunity in real estate can watch out for the following tips to enjoy the best returns from apartment investment.
Location: Two similar apartments can be priced very differently determined purely by location. A good place to start is to compare the land value of the identified projects. Then look out for the surrounding neighbourhood – schools, shopping and entertainment, should be in close proximity to a great home location. Weigh the pros and cons of a mixed-development vs. a purely residential one. Traffic and congestion are inescapable in any growing metropolis; therefore, choosing a locale that is commuter friendly, near major roads and public transportation, adds significant value to an investment property. Colombo is expecting a Light Rail System in the near future – proposed routes and stops could be analyzed to identify the most convenient access.
Developer and Contractor: Two pivotal players in your investment decision. Research the projects completed by both. Timely delivery is the most important factor to consider when planning for best returns; months and years in delays can be detrimental to your financial planning. Make sure you receive a construction schedule that is linked to the payment-plan, so you only pay on progress. Inquire after the reputation and experience of working with the developer and the construction company. Request to visit past project sites and look out for quality and finish of the build, as well as products and fixtures.
Design: The architecture, lighting (natural and artificial), common areas plan, landscaping, and layouts of the apartments, are all considerations for Design. Make certain all these aspects are professionally planned. Contemporary open-plan style is generally preferred by apartment dwellers for its easy maintenance. Heed cultural factors such as the local need for maid’s quarters and closed kitchens. High ceilings are a definite plus. Overall, look for neutral concepts that are unlikely to date too soon.
Amenities: Assess the amenities in a building in direct correlation to the needs of its potential tenants. A pool and gym are standard features in most modern developments and certainly add value. Keep in mind, more amenities mean higher maintenance fees. Be aware of these expenses and get an estimate of this monthly expense from the developer. Luxury developments will have a slew of amenities to offer – the trick is to figure out what’s expected, what’s needed and what isn’t.
Returns: Whether you are buying to live or buying to rent-out, be aware of the market potential of your investment. Do your research by browsing online listings and acquiring professional real estate reports – your developer will often have this information at hand. Keep abreast of trending neighbourhoods and potential new markets. For example, The Port City expansion project is set to bring in an affluent international workforce, thereby, creating a new market for luxury apartments in the mainland. There is also a growing expatriate community moving back to Sri Lanka – the retirees are on the market for secure, luxury housing and the young entrepreneurs and professionals are looking for that pad in the city.
Financing: Shop around for loan options from several banks. You can find a loan that is tailor made to your finances. Ask your developer which banks are willing to hold tri-partite agreements with them. Banks delve into stringent detail to ensure the legal background of a project is airtight, therefore, it is a good indication of a sound investment if major banks deem the development viable.
The Small Print: Make sure the legal documents, including titular documents, are in compliance with regulations. Check the credentials of the legal firm working with your Developer and confirm they are reputed professionals. It is well advised to hire your own legal counsel to safeguard your best interest. Find out all expenses related to the purchasing process such as taxes, legal fees, stamp duty etc. Request a list of apartment specifications from the developer, leaving no room for uncertainty in what you’re getting. Ensure Freehold against Leasehold rights on the property.
Residential property retains its value into the future depending on various factors that contribute to the livability of the location. When choosing to invest, look out for other similar grade residential projects in the area that will help maintain the neighbourhood, picturesque natural and curated public spaces such as lakes and parks, and accessibility to all conveniences, this will all ensure a high appreciation value of your chosen address. Colombo is, in preparation with Megapolis, to establish the needed infrastructure with expert city planning, to achieve the vision of a top livable city in South Asia.Will it all ever happen? There’s the gamble. Apartments are on the rise and investing is risky business, but some ground work and research should help you find that peak investment.