Are you eager to enter the property market but finding houses out of your budget? Consider investing in a unit or apartment as a smart first step onto the property ladder.
Recent data from CoreLogic reveals that unit values are rising faster than houses in over half of all suburbs across Australia, making apartments an increasingly attractive investment option.
Apart from being more affordable than houses, there are several other advantages to apartment investing. Let’s delve into the pros and cons of investing in an apartment versus a house.
Pros of investing in an apartment:
- More affordable entry point: The median house price in Australia’s capital cities is currently $975,592, significantly higher than the median unit price of $669,434. This lower price point means a smaller deposit is needed upfront, potentially making it easier to manage mortgage repayments.
- Fewer maintenance responsibilities: Unlike owning a house, where you’re responsible for all maintenance and repairs, apartments often involve shared responsibility through a body corporate. This typically reduces your individual maintenance costs and workload.
- Lower ongoing expenses: Expenses such as council rates can be lower for units compared to houses, potentially increasing your investment returns.
- Higher rental yield: Apartments generally offer higher rental yields than houses due to lower initial outlay and ongoing costs, which can help offset mortgage repayments.
Cons of investing in an apartment:
- Strata fees: In a strata-titled property, you’ll need to budget for ongoing strata fees. These can vary widely depending on the amenities and maintenance requirements of the building.
- Restrictions: Renovation and pet ownership may be subject to approval by the strata committee, impacting your ability to modify your property or attract tenants.
- Market oversupply risks: Investing in areas with excessive apartment developments can lead to lower capital growth and rental demand, affecting your investment’s long-term profitability.
Considering these factors, it’s essential to weigh the pros and cons based on your financial goals and circumstances before making a decision.
Discuss Your Finance Options:
Whether you’re eyeing a compact studio or a spacious unit, understanding your finance options is crucial. We can assist you in navigating investment loans tailored to your needs and financial goals.
Contact us today to explore how we can help you take the first step towards property investment success.