It’s the age old question and often a source of great debate for property investors. House or Apartment, Apartment or House?
Whilst investing in a house has some great pros and cons, so too does investing in an apartment. Here are 6 top pros for investing in an apartment.
1. Times are changing
According to official Australian Bureau of Statistics figures, the number of Australians living in a house is on the decline, with many Australians trading the backyard for the balcony and flocking towards living in inner-city apartments. The benefits of living in close proximity to the city, coupled with the convenience of having top-class restaurants, cafes, shops, public transport and other amenities just a short walk from the front door, highlight the pros of apartment living, and a trend that looks set to continue. This is great news for would-be investors, with high demand creating the opportunity for stronger rental returns.
Apartments are generally more affordable than houses, particularly in highly sought after areas, making them a particularly attractive option for first time buyers and investors.
When looking to build a property portfolio, it is often said that apartments are a smarter investment than houses because they are easier to rent out, have lower costs and require less maintenance and upkeep.
Official RP Data figures also indicate that apartments traditionally provide higher rental yields than houses ie the higher the rental yield, the better your return and therefore the greater your investment.
3. Low maintenance
Most apartments have small balconies which allow plant lovers to grow and enjoy low maintenance herb and potted gardens without the need to spend weekends mowing lawns and pruning trees. Some apartment complexes boast common grounds with lush lawns and garden areas. These areas are maintained by garden trades contracted by the building Strata Manager or Executive Committee.
4. There’s something for everyone
Traditionally, the lack of green space has been seen as a significant drawback to apartment living, and has perhaps made some investors think twice. However, apartments more than make up for this with a range of other possibilities.
When considering an apartment purchase, choose a complex that includes facilities such as a gym, pool, shared garden, rooftop terrace, kids’ playground or all of the above where possible. These conveniences are very attractive to tenants, particularly busy professionals and young families.
5. Thinking of renovating?
Whether you’re buying an apartment to live in one day, or one purely for investment purposes, chances are, it won’t be exactly to your liking upon purchase, and you may wish to renovate. This is another instance where an apartment is often the smarter option.
The advantages are all pretty straightforward. The smaller space of an apartment compared to a house means that your renovation budget has the potential to go further, and the renovation project may be less complicated and time consuming than renovating an entire house. Just ensure that you gain the proper permissions from your Strata Manager and Executive Committee/Body Corporate before commencing any renovation work.
6. Location, Location, Location
As with any property purchase, choosing the right apartment is all about location. Look for a dwelling inside a smaller apartment block if possible, and ensure that parking options are plentiful and convenient – it’s important!
Unique features can also add value, and increase desirability for tenants. Perhaps it’s one of the only three bedroom dwellings in a particular building or area?
Depending on your budget, it may be worth considering splashing out for the penthouse to make your place stand out from the crowd.