I Want to Buy an Apartment in a New Building: What Next?

Investor and expert in purchasing apartments in new buildings, Julia Noymann, explains how to buy a new apartment and what pitfalls you might encounter.

Julia Noymann is an expert in primary real estate, investor, blogger, and creator of the channel «Self-Investor in Real Estate»

I want to buy an apartment in a new building. Where should I start?

Answer the question: «Why do I need an apartment?». This could be housing for yourself, an apartment for rental, investment in a new building with the goal of resale, or simply saving money. Each strategy leads to a different approach. If you're looking for an apartment for living, consider the district, proximity of friends and family, greenery, presence of a supermarket, and your favorite sports facility nearby. If you want to 'invest' free funds, then the mindset shifts to investment. You must now think about which apartment is in demand and how to distinguish liquid property from illiquid.

How to choose a truly good option?

No matter what the purpose of buying an apartment is, you should check:

• how quality the apartment is as a product — what construction technology was used, how well all works were done;
• how liquid the real estate is in this area;
  
• how reliable the developer is;
  
• construction period and key handover time — it should not exceed two years.
  

How much money do I need to save?

Funds are needed for the initial payment (DP) on a mortgage and for monthly payments. Mortgage payments start at 18,000 rubles per month. With proper work by a mortgage specialist, the DP can be zero. The most profitable option: initial payment — 10–20%, mortgage term — 25–30 years with the possibility of early repayment at any time.

Tip: Create a clear financial plan — it is needed so that you understand from the start how much you invest, why exactly in this object, and what you will get as a result of the investment cycle. Do an investment calculation. Example:

• purchase price of a new building during construction — 2.5 million rubles;
  
• sale price — 3.2 million rubles;
  
• investment period — 18 months;
  
• initial payment — 20%;
  
• mortgage term — 25 years;
  

• payments — 21,000–22,000 rubles;
  
• income — sale price minus purchase price: 700,000 rubles;
  
• expenses — mortgage payments 400,000 rubles over 18 months;
  
• net profit — income minus expenses: 300,000 rubles.
  

What documents do I need?

• Passport — copies of all pages, including blank ones;
  
• marriage certificate, birth certificates of children;
  
• if you are not married — a notary statement confirming that you are not in a formal marriage;
  
• SNILS;
  
• TIN;
  
• copy of labor book, certified with stamps;
  
• employment certificate — 2-NDFL.
  

Additional documents may also be required.

Important: additional documents vary by case. For example, a birth certificate is needed if you need to prove kinship with your sister who already bought an apartment and received a discount on the next purchase from the same developer. Now, as a relative, you can also get this discount.

What difficulties and risks might await me?

The most common mistakes:

• you chose a poor developer and bought a long-term construction project;
  
• you were granted an irrevocable early mortgage and now must pay payments for 25 years;
  
• you bought an already purchased apartment and discovered this at the key handover stage — a gray scheme of double sales by the developer;
  
• you bought an apartment through assignment of rights and in the DDA, unpleasant conditions started to appear — for example, lack of penalty clauses for the developer in case of delays;
  
• you chose the wrong object and now cannot sell it;
  
• at the key handover stage, they require you to sign a contract with a property management company already signed for 6 months on behalf of the developer.