- Times are changing
Many Australians are now trading in the backyard for the balcony, with official Australian Bureau of Statistics figures showing that the number of Australians living in houses is continually falling.
More people than ever are flocking to inner-city dwellings, typically apartments, enjoying the convenience of having top-class restaurants, cafes, shops and other amenities just a short walk from the front door. This is great news for would-be investors, with high demand resulting in strong 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. Furthermore, most of the ongoing maintenance and upkeep costs for the building in general are shared amongst the whole body corporate of an apartment complex.
It is sometimes said that because apartments by design have less of a ‘land component’, they will not appreciate in value at the same rate as houses. However, this is not necessarily the case, with apartments outperforming houses in value appreciation in many areas. This is due to the increasing popularity of inner-city living. In addition, official figures from RP Data indicate that apartments traditionally provide a better rental yield when compared with houses.
3. What works for you?
In short, houses are a lot more work than apartments. When investing in a house, everything on the entire property, including boundary fences and interior appliances, is generally the sole responsibility of the home owner to maintain. This can often result in a lot of time and money spent ensuring that the place is suitable to be rented out, particularly in the case of larger, older houses, or those with big backyards.
In contrast, an apartment owner is generally only responsible for repairs inside the property itself. Apartment maintenance is otherwise looked after by the body corporate for a fixed cost, making it easier to plan for expenses, as well as taking the hassle out of maintenance and repairs.
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, go for a complex that includes facilities such as a gym, pool, shared garden, rooftop terrace and kids’ playground – all of the above if 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 can go further, and the whole project will be less complicated and time consuming than renovating an entire house. Just ensure that you gain the proper permissions from the body corporate manager before commencing any renovation work.
As with any type of property purchase, choosing the right apartment is all about location, location, 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 if possible, to make your place stand out from the crowd.
Feeling inspired and ready to jump on the apartment bandwagon today?