- PepperMember@pepperJoin Date: 2004Post Count: 48
Like I said in my first post I am looking to buy my second investment property which is a house making it 2 houses. But I have friends who told me that it is cheaper to buy units or apartments and mostly because financially it makes more sense. I dont have a preference for either but I know people who only by one or the other.
What does everyone here think???? and why.
Pepperjars11Member@jars11Join Date: 2003Post Count: 92
Dont worry if it seems like there is no response to your post initially, the forum can be fickle at times, just like the market I suppose…
I personally prefer houses than appartments, only due to land content, which matters most, location and the type of market I wish to appeal to also factor. Its a pref initially, but if it comes down to cost to get started, then do it if you find it beneficial. You can achieve very reasonable PP costs with a house, just the same as appartments, so dont be put off by that. Depends completely on your strategy, your situation, etc.
Keep doing the sums, numbers matter most and tell the true story…
JarsAceyduceyParticipant@aceyduceyJoin Date: 2003Post Count: 651
It’s possible using a house, a unit or a both strategy.
There are some differences you need to keep in mind.
They can’t build more houses in most good locations – the land’s already in use.
They can always build more units….by knocking down houses.
Land appreciates over time….there’s no cost-effective way to create new land in prime locations. Whereas dwellings depreciate – it’s always possible to knock down & build more dwellings.
Thus for the most part, houses tend to provide better capital appreciation than units…I’m not certain on average which option, houses or units, provide a better cashflow, however in our own experience our units tend to provide a better cashflow – but that’s also due to location.
So if your strategy is based on capital appreciation, houses may be a better option. If you’re seeking cashflow or are starting with lower loan amounts, units might work better for you.
BUT, do your research, every area is different & you may find that a different paradigm applies in your target areas.
And be careful who you listen to – how successful have your friends been?
In theory, there is no difference between theory and practice. But, in practice, there is.
– Jan L.A. van de SnepscheutBrisbane 04Participant@brisbane-04Join Date: 2004Post Count: 215
[biggrin]I agree with aceyducey. I have a mix of units and houses. On a capital gains situation the houses have performed much better than the units. The units however have provided better positive cash flow. I think its good to have a mix of both. Capital gains helps you to buy more properties, positive cash flow helps to service the loans. Every investment is a risk, all you can do is educate yourself, and thoroughly research the area where you are going to invest in to minimise those risks ie take calculated risk. Anyone who tells you an investment is risk free is an investment I am most wary about. Anyway assess where your at, at present and decide which way suits your needs at present.
MartinPepperMember@pepperJoin Date: 2004Post Count: 48
I prefer houses as investments myself but thats not to say I wouldnt buy a unit if the price was right and the location was good. And a healthy mix of both is a good strategy for sure!!!!!
You all made excellent and valid points and I appreciate you taking the time to give me your opinions.
PepperMortgage HunterParticipant@mortgage-hunterJoin Date: 2003Post Count: 3,781
whilst houses have theextra mainteneance aspects many apartments have high oners corporate fees etc.
I prefer houses because of the higher land content but many people do well in apartments too.
I wonder if there might be soe cheap apartments soon with all the OTP stuff due for settlement soon? What do folks think?
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.MonopolyMember@monopolyJoin Date: 2004Post Count: 1,612
I think there will be/is a lot of “off-loading” in the pipeline!!! [blush2]JetDollarsParticipant@jetdollarsJoin Date: 2003Post Count: 2,435
Personally, I don’t think you should restrict yourself to just one type of investment, restricting yourself will only restricting your opportunity to move forward.
I bought house, unit, townhouse, villa and semi-detached. If I see the opportunity to create wealth then I buy it.
[Retire Young, Retire Rich]
Share Investing Forum: http://www.aussiestockforums.comkay henryMember@kay-henryJoin Date: 2003Post Count: 2,737
I buy units. hehe- I should make a website called “Ibuyunits.com.au”. Wonder what our friend would think [baaa]
Whilst there are many arguments for buying houses over units, units are something I first bought into, and have become used to. You are probably right about units being more affordable than houses. It might be because they usually have a smaller space, and certainly a smaller land mass.
What I like about units is the collective responsibility for maintenance via Body Corporate fees. Others dislike this collectivity. I am very hands-off, and am happy to allow others to attend the meetings. Having interstate property, means that I can just allow others to make decisions, and I can just set and forget- works for me. Also, if there is something wrong with the roof, or some structural problem, we all share the cost. Special levies (for unusual works, or maintenance, or unforeseen expenses) can occur though in units. I haven’t had to pay this, but I imagine it could be a pain.
I think one develops a taste for what one likes. You could be a “houses only” type, or a “units only” type, or have a mixture. i feel comfortable knowing one market, and don’t feel much need to move out of that right now, but I’d be happy to buy a house if it was at the right price.
I think I also invest for what I prefer personally. I like apartment living, so I think it becomes an easy investment choice for me.