Many investors will put their money into an apartment, especially when they’re at the early stages of building their property portfolio.
With apartments generally more affordable than houses, this can make sense for many.
However, investing in a house also has significant advantages. Most have higher rental returns because many tenants have families and want larger living areas and gardens and you can renovate without having to navigate a strata committee or body corporate.
Depending on your investment strategy, a house also offers more potential for greater capital gain because of its land. That’s because buildings – not land – are depreciating assets. When you buy an apartment, little of what you own will be apportioned to the land component.
However, houses are also more expensive to maintain, and the rental income might not cover mortgage repayments and expenses. So here are six reasons why many investors are now preferring to invest in a new apartment:
- Affordable entry – Entry-level pricing is lower for apartments than detached houses and townhouses. This can be great news for first-time investors and a good way to get started with your investment strategy.
- Modern design – New apartment blocks are designed to maximise the use of every square metre. There’s no wasted space.
- Everything fits – Fittings like wardrobes and clever kitchens are part of the design of a new apartment, which means you don’t have to think about renovation.
- Lifestyle at the door – Many new apartments feature fabulous amenities, such as a gym, swimming pool, tennis courts and communal garden with barbeques. That’s excellent news for setting your rent.
- Safe and secure – CCTV and security will often feature at major apartment blocks, offering tenants a quality of security that’s too expensive for a house.
- Off street parking – Most modern apartments feature underground parking, which protects tenants’ cars from the elements, potential thieves and vandals – another winner for your rental income.
This article is provided for general information only and does not take into account the specific needs, objectives or circumstances of the reader. Before acting on any information, you should consider whether it is appropriate for your personal circumstances, carry out your own research and seek professional advice.