Do you invest in a house or a unit?
October 14, 2014 / Written by Rich Harvey
Deciding where to invest can be a tricky process, albeit one made much easier by engaging the services of a buyer agent. But on top of choosing which location works best for your investment property purchase, it is also important to consider what kind of property to buy. Do you want a family home to appreciate in value, or to get in early on a new apartment development and rent out a unit?
Inner city pressure
According to RP Data, a very high concentration of property investment in state capitals has gone into inner city apartment markets. This has particularly buoyed the Sydney and Melbourne markets, which have seen prices rise significantly over the last 12 months.
However, the Reserve Bank of Australia has expressed concern about the pressures this puts on the market. If people were to leave these central areas all at once, it could lead to a depreciation in home values.
For now the speculative investor interest in CBD units is keeping prices high. Looking for units outside of these areas could be a viable option, and one that a buyers agent can be of service with. By gauging growth in all areas of a city, they can highlight a wide range of investment prospects to fit your financial goals.
Further RP Data research shows that Sydney rental yields have risen more for units than for houses over the past five years - if this continues, then they may be an ideal investment prospect.
Ease of maintenance
Another important factor to consider is the level of maintenance required and what you can actually do. While units typically require less maintenance, the strata body that runs the apartment building is often an obstacle should you ever wish to undertake works on a unit.
Louis Christopher of SQM research has noted that by investing in a standalone home, you can undertake renovations to greatly improve the capital value of a property, which is not possible when investing in a unit.
Whatever your needs for property purchases, it is vital to get expert advice on your side. A trusted and certified buyers agent will not only seek out the best areas for your capital returns, but provide advice on how to gear a home financially as well as your future financial plans. They are a crucial element when you wish to get the most out of an investment - whichever type you choose, and no matter which area of Sydney you are interested in.