As cities become more built up, the range of dwelling options available to property investors continues to expand. For most investors in the market for a new property, you’ll typically be choosing between a townhouse, a house, or maybe an apartment. Each option has upsides and downsides, and the dwelling type you choose will depend on a few key factors, such as your budget and long-term property investing goals. today we aim to outline things investors should consider when deciding between dwelling types for investment properties.
Apartments provide affordability
For many years, the consensus has been that buying an apartment is a bad investment. This is because investors wanted to buy property where the land would appreciate in value, which isn’t possible with an apartment. So we must always keep in mind that with this option, the entry price is lower for this reason, in comparison with other property types. However, with the population rapidly growing and tight rental markets pushing rental prices higher, an apartment may be an option for property investors searching for yield and a lower price than townhouses or houses in the same area. It can help you to get into the market. If you’re considering buying an apartment, pay careful attention to strata fees, the ratio of renters to owner-occupiers in the building, and the apartment building’s orientation, ensuring it has plenty of natural light.
Townhouses can bring the best of both worlds
If you’re looking to invest in a property that provides the ease of apartment living with a bit more space, a townhouse can be a solid option. Like apartments, you should carefully consider the complex's strata fees and ensure the townhouse is in a desirable location. One of the most desirable townhouse options for people looking to make their mark on their investment property is a townhouse with an independent ( Strata) title. This means you won’t have Body corporate costs, and you won’t need approval to change the property's external appearance. With this option, you own the title of your property with some shared areas within the strata, so it is optimal to ensure the townhouse includes a high land component as a percentage of the purchase price.
A house provides independence, but everything is up to you
A house is a great way to secure a desirable property and parcel of land that will provide yield and long-term capital growth. Unlike apartments and townhouses on strata titles, everything is on you when you buy a house as an investment property. From insurance to maintenance and repairs, it’s all your responsibility and may be more costly to upkeep if you buy a larger property. However, some may argue you would have to pay body corporate fees in lieu of general maintenance and insurance for areas outside an apartment, so it’s comparable.
If you’re looking to purchase a house, buying in an area with strong economic drivers, low maintenance costs and a track record of strong rental demand is key. This doesn’t have to be in the city, either. Many regional areas offer attractive investment locations, but you need to do thorough research and get to know the area well.
The type of property you buy as an investment can greatly impact how your property portfolio grows over the years. Each option has upsides and downsides, so it’s critical that you seek tailored advice and make sure your investment aligns with your unique goals. We can also assist with research in specific areas or advice in the type of property to consider that best suits your goals.
Speak to Craig Bellgrove or leanne Masters to see how we can assist you