Five Red Flags & Five Green Lights When Investing in Apartments

Apartment investing is one of the most accessible and scalable ways to build a property portfolio, especially in high-demand urban markets like Perth. But not every apartment represents a smart investment. Some carry hidden risks, while others offer the right mix of demand drivers and durability.

Here’s a practical checklist of what to avoid and what to actively look for before you commit.

🚩 Five Red Flags

1. Inexperienced or opaque developer

Trust starts with a track record. If a developer has limited experience, no visible leadership team, or few (if any) completed projects you can inspect, proceed with caution.

Transparency matters, so does a long-term reputation for quality, delivery, and financial stability.

What to check:

• Does the developer have experience?

• Are they actively completing projects?

2. Oversupplied micro-market

While Perth overall faces apartment undersupply, hyperlocal oversupply can still occur. If several new projects are launching within the same block or suburb, rents may stagnate, and valuations may fall short of expectations.

What to check:

• Number of projects in the immediate area

• Vacancy rate and rental price data

3. Weak amenity mix or poor design

Tenants (and valuers) notice cheap finishes, awkward floor plans, poor light and airflow, or buildings with no lifestyle appeal. These issues can lead to higher vacancy and reduced long-term value.

Look out for:

• Lifestyle amenities that add value, like gyms and pools

• Amenities that have a wow factor, like rooftop bars and theatres

• Lack of storage and low-spec finishes

4. Strata fees that don’t match the offer

A high quarterly levy isn’t always a dealbreaker, but it needs to be justified. If strata costs are high and the building lacks meaningful amenities or long-term sinking fund planning, it’s a red flag.

What to check:

• Comparative strata fees for similar buildings

• A breakdown of what strata covers

5. Consistent negative sentiment from residents

Online reviews, strata meeting minutes, or high tenant turnover can point to problems. Frequent disputes, poor maintenance, or unresolved defects should raise alarm bells.

✅ Five Green Lights

1. Trusted, long-standing developer

Choose a developer with decades of experience, transparent reporting, and a strong WA legacy.

Finbar, for example, has delivered 7,400+ apartments across 79 developments in Western Australia and is backed by 30 years on the ASX.

Why it matters:

A long-term track record means better build quality, delivery certainty, and post-settlement support.

2. Proven rental demand location

Properties within walking distance of CBDs, hospitals, universities, public transport, or entertainment precincts tend to lease faster and retain tenants longer.

Look for:

• Suburbs with low vacancy rates

• Transit-oriented developments

• Nearby employment hubs

3. Amenity set that tenants actually use

Modern tenants are drawn to lifestyle-driven buildings — think gyms, pools, work from home spaces, rooftop areas, or dog wash bays. These features improve rentability and justify premium rents.

Tip: Not all amenities are created equal. Choose buildings where communal areas are well-maintained, used, and aligned with the target tenant demographic.

4. Efficient, future-focused design

Apartments that are energy-efficient (check for NatHERS ratings) and well-planned reduce long-term holding costs. Features like double glazing, LED lighting, centralised hot water systems, and good airflow support tenant satisfaction and lower outgoings.

Bonus: These buildings also tend to age better and stay competitive in the rental market for longer.

5) Balanced owner-occupier / investor mix

Buildings with a mix of investors and owner-occupiers often experience better care, stronger communities, and more stable value growth. Purely investor-stock can experience higher turnover and less long-term focus.

Turning the checklist into action

Use this guide as your due diligence cheat sheet. Whether you’re touring a display suite, viewing a listing, or speaking with a sales agent, tick off the green lights and press pause if you spot too many red flags.

A great apartment investment should feel durable, well-located, future-proofed, and backed by a team you trust.

If you're interested in investing in a Perth apartment, look no further than WA's largest and most trusted developer, Finbar. With 30 years on the ASX, 79 completed developments and 7,400+ apartments delivered to the Western Australian market, Finbar isn't just a developer; they're a part of the city's foundation.

To find out more about Finbar's current development, visit https://www.finbar.com.au/

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Any information or advice is intended to be of a general nature only and has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries and consider whether the advice is appropriate for you.