Should you invest your hard-earned cash in house on a quarter acre block, or a low-maintenance apartment in the city?
It’s the age-old question that plagues property investors across the nation, and as is often the case when it comes to real estate, there is no clear-cut answer.
When buyers look at a property for themselves the majority tend to go for houses, mainly due to the development potential. A decent block in a growth area then there is the possibility of developing the site –even if only to the point of a dual occupancy – and increasing the yield.
However, this is not necessarily a blanket strategy that applies to all investors. The long-held argument for houses over units has been largely drawn from the belief that “the value is in the land”, as land appreciates and buildings deprecate, and therefore houses are always the premium option.
When trying to decide between houses or units, you should evaluate your options based on “the quality factor”. This means investing in the best quality property you can afford within your budget – regardless of whether its strata titled or standalone.
In regards to units, you need to pick quality developments in quality areas with a good agent, as this provides a desirable property to tenants. This translates to maximised rental returns and minimal vacancy rates, which maximises your income.
[box type=”shadow”]Top three tips for a profitable property investment:
- Structure in routine maintenance. If you keep your property, whether it’s a house or unit, in good repair, you increase the property’s overall profitability.
- Engage an A-list property manager. If you have an agent who is diligent and takes care of the property, and who doesn’t keep changing the method of rental payment, you will have happy tenants and therefore a lower vacancy rate.
- Review rents regularly. A good agent will help you make sure you are charging the market rent, instead of too much or too little.