6 apartment tips

The 6 Golden Rules of Buying a High-Performing Apartment

Based on 30+ years’ experience across Australian apartment markets.

Australian property investors make money in five ways:

-capital growth,

-rental returns,

-accelerated or forced growth,

-equity build up,

-and tax benefits.

Capital growth is a much more important driver of your wealth creation than cash flow, so you must have a financial buffer to cover any rental shortfalls, or vacancy.

Too many investors don't recognise that property investment is a game of finance. Not only the loan interest rate, but also the loan type is important.

Equity build up occurs through a combination of capital growth, accelerated or forced growth, inflation gradually eroding the real value of the debt, as well as loan repayments reducing the principle owed.

Many beginning investors simply look for location, price and rental cash flow, or cash flow positive properties.

But capital growth is the most important factor of all in the performance of your investment property, even though cash flow may be the ultimate end goal.

​​​​​​​Introduction

Houses have seen significant capital growth over the past decade, pushing well located houses in the “unaffordable” bracket for many people.

So the question then arises – if someone wants to get into the market, or increase their portfolio, do they look for houses in more affordable areas, which may mean country or regional towns, or do they compromise and choose a well-located apartment?

Both strategies have their downside and their merits, and of course, their fans and critics too.

If the first rule of real estate investing is not to lose money and protect the downside risk, then that rules out many country or regional areas, AND most apartments.

For those choosing an apartment, it is important to find an apartment that represents potential for premium performance, and not just because it is generating a rental return.

It must possess specific qualities that drive long-term wealth accumulation primarily through capital growth and equity build up, rather than just immediate cash flow.

However there is a scarcity of quality "Premium Performance" apartments on the market.

Buying an apartment — especially in major cities like Sydney or Melbourne — can feel attractive: relative easy to finance, strong demand, urban lifestyle, and reliable income from rent.

But many apartments underperform. They attract the wrong tenants, suffer from defects, poor design, high upkeep costs, lack of demand from owner-occupiers — all of which hurt your long-term capital growth and equity build-up.

If your aim is long-term wealth creation, capital growth and equity build-up should matter more than short-term rental yield. That’s why you need to be selective.

This guide lays out the six golden rules I’ve used over 30 years to identify premium-performance apartments — units that appeal to owner-occupiers, avoid value traps, and hold their value over decades.

The 6 Key Investment Principles for Selecting a Premium Performance Apartment

The following criteria are based on my 30 years of specialising in apartments throughout Australia. If your goal is to buy an apartment that performs strongly—not just as a rental, but as a long-term, wealth-building asset—these six principles are essential.

A Premium Performance Apartment is an apartment that consistently outperforms its peers because it appeals to the deepest and broadest segment of demand: quality owner-occupiers.

Focus only on Premium Performance Apartments — the ones that meet the minimum of 6 key investment criteria

1. Strong Appeal to Owner-Occupiers

Owner-occupiers—not investors—set long-term capital growth.

Investors often make the mistake of choosing an apartment based purely on yield. While yield matters, it is owner-occupiers who emotionally connect with a home and are willing to pay a premium for the right apartment.

To ensure you benefit from this premium, the apartment you select must appeal to a wide range of affluent owner-occupiers.

That means:

• A desirable floorplan - not cramped, awkward layouts; ideally functional, with good natural light, privacy, and sensible use of space.
• Quality finishes - these matter a lot to people buying for lifestyle, not just investment.
• Good natural light
• A sense of privacy
• A building that people are proud to live in - well-maintained common areas, good building presentation, secure entry, and a building reputation matter.

If owner-occupiers don’t love it, capital growth will always be limited.

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2. Buy Below Intrinsic Value

One of the most powerful ways to reduce risk and future-proof your investment is to buy under true intrinsic value. This can occur when:

• A seller needs a quick sale
• A sale is distressed or time-sensitive
• A resale occurs 5–10 years after the original "off-the-plan" purchase, often selling below its original price
• An owner-occupier upgrades and wants a simple, fast transaction

These opportunities exist in every market, but they must be identified carefully.

Be extremely cautious with brand-new or off-the-plan apartments.
Many come with developer premiums, marketing margins, and inflated valuations. This means you may be paying above intrinsic value from day one.

3. Superior Location

Location has always mattered, and it will matter even more in the decades ahead.

A Premium Performance Apartment must be situated in a location that will remain desirable for a very long time. That typically means:

• Quick access to major employment hubs
• Proximity to trams, trains, or frequent bus routes
• Supermarkets, shops, cafés, and services within a short stroll or tram/bus stop away
• Outdoor spaces, parks, or lifestyle amenities
• A high walk-score, signalling real convenience for daily living

A poor location cannot be fixed—no matter how great the apartment is. A great location is a permanent advantage.

4. Uniqueness: Something That Makes It Stand Out

The apartment must be different from the hundreds of generic units competing for the same buyers.

Avoid buildings with:

• Dozens or hundreds of almost identical floorplans
• Mass-produced layouts
• Minimal architectural merit

These create an oversupplied, highly competitive resale environment—which drives down growth.

Instead, look for apartments with:

• Great street appeal
• Architectural character or quality design
• A favourable aspect (north-facing, treetop outlook, city views, bay glimpses)
• A standout layout
• Unique building amenities

Uniqueness is a critical driver of demand and future value.

5. Strong Security and Safety Features

Safety is not optional anymore. Security has rapidly become one of the most important considerations for buyers and renters alike. In fact it may well become the single most important reason some people like single females and elderly couples choose to live in an apartment rather than a house or townhouse.

A Premium Performance Apartment will provide:

• Secure, well-lit access from public transport stops
• Quality intercom systems
• Gated or restricted-access entries
• Secure carparking (preferably with multiple security points)
• Additional features such as CCTV or a concierge in higher-end buildings

Apartments that offer superior security attract higher-quality tenants and a deeper pool of future buyers.

6. Balanced Body Corporate Fees

Body corporate fees are often misunderstood. Many of the very best buildings have higher fees because they:

• Offer superior amenities
• Maintain high security
• Are kept in excellent condition
• Are low-volume, non–mass-produced developments with higher per-lot quality standards

However, high fees reduce the pool of potential future buyers—especially:

• Downsizers
• First-home couples
• Investors
• Recent migrants trying to get established

This makes body corporate fees a balancing act. You want a building where the fees reflect genuine value, not wasted expense.

What about older buildings?

Well-selected older apartments can strike a good balance—but only if they meet the other criteria. A tired 1960s red-brick walk-up with no lift, no view, and dated appeal is unlikely to perform well, no matter how low the fees are.

In Summary

A Premium Performance Apartment is one that:

• Attracts strong owner-occupier demand
• Is purchased below intrinsic value
• Sits in an irreplaceable location
• Offers unique qualities that stand out
• Provides genuine security and safety
• Has body corporate fees that reflect true value and are affordable for the specific market

When these six principles align, you dramatically reduce your risk and maximise your long-term capital growth potential.

But of course they are also other factors you need to consider, such as oversupply, street-level risk (eg. high public housing pockets), rental vacancy, proportion of owner-occupiers to investors (in specific buildings and in the suburb itself) and one of my favourites: is the "ripple effect" likely here?    

If you’d like professional help assessing an apartment against these criteria—or want me to find you the perfect apartment that meets all of these criteria, let's chat -- I am available to assist.

**Ready for your next step?

Book your Personal Apartment Briefing — Free 45-Minute Session.**

Get clear, expert guidance on your apartment goals in Sydney or Melbourne.
No pressure. Just straight, professional advice.

👉 Book Your Free 45-Minute Briefing