Real Estate | 4 Strategies To Choose Between A House And An Apartment For Your Investment Property
If you're in the market to buy a real estate property as an investment, then you know that every decision you make will influence the type of tenants you attract. Deciding between a house and an apartment will depend on a myriad of factors, so follow these strategies when choosing between them for your investment property.
Establish Your Property Type Based On The Area You Desire
If you have a particular suburb or neighbourhood in mind for your real estate investment property, then you must consider the type of property based on popularity of the area. Choosing a popular real estate property type will help you attract the right tenants for your home. For instance, if an area is popular with large families who live in houses, then buying a small apartment can possibly make it more difficult for you to attract tenants.
Determine Your Financial Commitment Based On Your Loan Payback Ability
Your financial commitment with a house will be greater than with an apartment. For example, in Sydney, the median price of a house is approximately $914,056, while the price of an apartment in the city is $609,800. Similarly, the median price of a house in Melbourne is $718,000, while the median price of an apartment or unit is $537,500. You will need to establish your loan payback ability when deciding whether a house or apartment is better suited to you.
Consider Your Desired Demographic
Your desired demographic will help you make a decision between a house and an apartment when buying a real estate investment property. For example, if you're looking to attract families, then a house may be a better investment because parents usually appreciate private backyards for their kids to play in. If you're looking to attract young professionals, then an apartment will be a better choice because busy professionals prefer low-maintenance properties. This is because they tend to spend more time at work and may not have enough time for household chores.
Consider Maintenance Costs
You must consider all maintenance costs before making a decision based on your personal circumstances. House owners are usually liable for repairs inside and out, while apartment owners are responsible for interior real estate repairs. Apartment owners typically pay strata levies to cover the costs of building maintenance, while house owners will need to pay ongoing costs, such as land costs and water rates, separately. The advantage of owning a house is that you will not need to get third-party approval for any internal home renovations. In an apartment, you may need to get permission from your strata or ownership corporation, which may delay your repair effort.
Make sure you follow these strategies when choosing between a house and an apartment for your real estate investment property.