Is it Better to Own a Home or a Unit? 3 Things to Consider
An interesting choice the Australian housing market offers is between owning a home or a unit. The best option depends on where you want to live, how much space you want, and your budget. Each has a set of pros and cons. It also helps to look at each possibility through the lens of a lender.
Lenders are in the business of lending and managing risk. If you request funding, a lender needs to know how you’re going to use the property. There are different standards for an owner-occupier and investor.
Purchasing a home gives you indoor and outdoor space. You also get privacy and flexibility to renovate, decorate, and upgrade as you see fit. Homeownership comes with a set of responsibilities, too. There’s no superintendent to complete repairs or maintenance. All the utility bills arrive in your name, but a home is your opportunity to begin building wealth.
Residential homes receive the most favourable loan terms. They’re seen as less risky than a unit by lenders.
In Australia, a unit is described as an apartment that sits in a multi-unit property. Often, you share walls with your neighbours. The space is small and it’s located in the city as opposed to a rural setting. For some residents, owning a unit is more convenient than owning a home. You might be single and not need a lot of space. It’s also in a prime location.
These are features that attract you. For a lender, they’re thinking about the owner after you. They’re thinking about the unit’s resale value. If you want to live in a unit, give yourself plenty of time if you think you’re going to sell it in a few years. As an investor, it’s a good idea to speak with lending representatives before moving ahead with the project.
Home or a Unit
When picking between a home or a unit, decide how you’re going to use the property. Next, you’re ready to prepare for the lender’s expectations. There are several reasons why each housing option provides benefits. Residential properties receive the most favourable loan terms. At Mortgage House, we also welcome investors and builders.