Unit vs. house – which is a better investment and why?

Posted on Wednesday, April 20, 2016 - 09:40

There is a question that torments most people when they want to purchase their own home and make a smart investment: Should I buy a house or an apartment?

No one has ever been able to come up with a clear-cut answer because there are many things that can determine the profitability of a property. Usually, the answer depends on the market and the place itself. Sometimes, it may be better to buy a house and other times you are better off purchasing a unit.

Proper Research Brings You to the Best Investment

Before buying a property, you need to do some background research and see the development of the marker. That being said, you shouldn’t just focus on the property, but on the market as well. Before buying a house, there are three main factors you need to keep in mind.

  • Affordability: Look for a place that will bring you the most money. Since you invest in the place, you want it to bring you profit; thus, it doesn’t matter where it is as long as the market is on your side.
  • Long-term Supply & Demand: Check what’s being built and what’s being approved. Depending on the projects, you might find yourself with an oversupply of houses and units in the future.
  • Economics: Always pay particular attention to how the market changes. Go for the places that have a lot of potential to create jobs in the future, or which seem to start prospering.

Sometimes, it’s not the living quarters that are important, but the area and the future potential of the place.

Investing in a House

Once you invest in a house, the place becomes your sole responsibility. You must pay for all the upkeep, repair etc. This can cost quite a lot of money in comparison to an apartment where generally all upkeep is bundled into strata fees which could end up being cheaper than upkeep on your house. However, houses can prove more valuable if you take into account the land. If you purchase a house located in a good area in accordance with the three factors mentioned previously, you might have more advantages in the future.

Investing in an Apartment

When you get an apartment, you need to take into account the area as well as the utilities. If the complex has fancy features like swimming pools or lifts, the costs will go up. Not to mention that if those features need repairs, they might cost a small fortune. Also, in some areas, the size of the complex and the living quarters can be an issue.

However, units can prove to be more affordable on the market compared to a house, and you also have the benefit of maintenance and insurance from the body corporate. Granted, you won’t have the benefit of the land, but you will have your four walls and lowered taxes if you’re only looking for a place to live.

The debate still continues, but most of the time, it all depends on the current needs of the tenants. However, it’s a known fact that apartments are becoming more and more popular in Australia, as they are continuously bought and sold every day.

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