For most investors in the market for a new property, you’ll typically be choosing between an apartment, townhouse or house. 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. This blog outlines what 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, which isn’t possible with an apartment. However, with the population rapidly growing and tight rental markets pushing rental prices higher, an apartment can be a good option for property investors searching for yield and a lower price than townhouses or houses in the same area. If you’re considering buying an apartment, pay careful attention to 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, 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 title. This means you won’t need approval to change the property’s external appearance.
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, 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 and a track record of strong rental demand is key. Many 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 advice and make sure your investment aligns with your unique goals.
Remember, this blog is general in nature and is not financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.
