Apartment, unit or house?
Are you tossing up between an apartment, unit or house? If you are looking for a place to live, it is different to deciding on an investment property. For investors this simple decision can make a big difference in rental return, the type of tenant they attract and possibly even the capital gains.
When people picture the traditional Australian house, they picture a solid 3 bedroom home, with a large backyard for entertaining. However even though this idea is still a very popular choice for home buyers, is it necessarily the best option for investors?
One of the biggest factors when you are deciding to buy an investment property is capital growth. A common real estate fallacy is that residential properties tend to enjoy higher capital growth than units or apartments. However the latest residential price data from the Real Estate Institute of Australia (REIA) suggests this is not necessarily the case.
When considering price, there is no doubt that purchasing a unit is the cheaper option. If you look at the mean prices across suburbs this will be reflected quite plainly.
Through the lower entry price of units and apartments an investor can take the opportunity to purchase property in blue chip or developing area they might otherwise be unable to afford.
Due to rental return having the ability to make or break your investment, it is recommended that you choose a property that ticks all the boxes for tenants and rental return.
Real Estate Institute of Australia (REIA) advises that purchasing a good quality apartment in a great locale has the ability to match or exceed the returns on a similarly priced house.
When purchasing a house, you are actually investing in both the land and the home that sits on it. As units do not have their own land, it is important to purchase a unit with other attributes like size, architectural appeal or lifestyle. Common items that are popular with tenants include proximity to universities, onsite car parking, security and access to public transport and shopping.
To help you make the decision on your investment, contact Alert Property Group.