House, or Unit? Which Is the Better Investment?
If you’re looking to invest in property for the first time, one of many questions you might find yourself asking soon (if not already) is: What kind of property should I invest in?
It’s all dependent on the market and other external factors. In some situations a house is the better choice. In others, units are the way to go. What’s important is that you know what factors to consider when weighing up the options.
Factors such as:
If upkeep is a huge factor for you, apartments or units might be the more desirable option. When you invest in an apartment, the upkeep is handled by the body corporate.
When you invest in a house, everything that happens to it falls on you. You pay 100% of the upkeep costs (and you have to handle it yourself).
But be careful investing in an apartment if the building has elevators, swimming pools and other expensive features. These features will drive the body corporate fees up substantially.
The affordability of your property
Simply put: Will your market be able to afford the property you invest in? The number one driver of competition between properties is price, so it might not be advisable to buy in an expensive suburb.
Despite what some may assume, there is far less demand for property in high-end suburbs than there is in the more “traditional” suburbs. Be sure to seek sound advice from impartial, trustworthy experts.
The listing agent can definitely give you some advice, but take it with a grain of salt. Regardless of how trustworthy a person they are, it’s not in their best interest to explore the negatives of the property they’re trying to sell you.
The economic situation of the area
If you’re going to invest in a property, it pays to know a lot about the area it’s located in.
Are there jobs? Will there be jobs ten years from now? What are the implications of nearby construction projects?
Let’s say the area you’re looking into is a noisy area close to the city. Let’s also say a huge university is being built there and should be finished in the next three years. In that situation, it might be better to invest in a small and affordable studio rather than a big family home with a pool in the backyard.
Or it might not, but that’s for you to determine.
At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.
But don’t worry, we can help with that.
If you’re thinking of buying a home, you can contact us for advice about the best options for you when it comes to your mortgage. The cost of your mortgage can drastically affect your financial planning, so it pays to speak to the experts about it.