Inner-city factory/warehouse apartment conversions have been popular with home-buyers, investors and amateur developers. The reasons are obvious – location, amenity and appeal, particularly those apartments with large spaces, lofty ceilings and a fashionable ‘industrial’ feel.
There are pitfalls……………
Owner-occupiers need to know exactly what they are purchasing and the extent of their obligations for common area maintenance. Investors need to be confident of the likely rental return and developers need to be sure that they will be able to get the necessary statutory approvals for the project.
Whatever the objective, factory/warehouse buyers need to be satisfied that the building is sound and that no major expenses are likely to be necessary in the short term. Replacement of the roofing, the drainage system or the electrical services can often be required, none of which are low cost items. In addition, structural or damp-proofing work may be required before the building can be made fit for habitation.
All of these things can be assessed by a qualified, trained property assessor and anyone buying – or buying into – an older commercial building would be well advised to arrange a pre-purchase assessment.
For developers, the potential of the building for conversion into apartments should also be assessed prior to purchase in view of the time, cost and risk associated with such a project. A development Feasibility Study should consider site access, car-parking provision and fire separation between units, as well as the basics of optimal planning and interior design.
If you’ve got your eye on a fantastic ‘loft-style’ apartment or an old factory with potential, do your homework. If it looks too good to be true, there’s probably a reason for it.