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  • Profile photo of KRH83KRH83
    Participant
    @krh83
    Join Date: 2008
    Post Count: 47

    Hi guys, just after any opinions on the future demand for units or townhouses.

    So I've read that the average household size has dropped from around 5 to 2 which means that there is a growing demand for smaller dwellings. So I understand that i should be looking at units or townhouses for my next IP.

    But which style would be in greater demand in the future? Surely a 2 person household would still like to have some space like a courtyard and spare bedroom/study?? And especially in high density areas where there are units upon units, a townhouse would have scarcity value, yes?

    Or is the small 1 bedder in the inner city going to have the stronger demand and higher overall growth than the townhouse in the middle ring?

    Please help me make a decision i can stick too!!

    Cheers,

    K

    Profile photo of nataliebransonnataliebranson
    Member
    @nataliebranson
    Join Date: 2009
    Post Count: 31

    Hi K,

    1 bedder, inner city is certainly in demand, rental shortages are on the increase. No matter what you purchase, it should get snapped up fairly quickly.

    I think you cant go wrong inner city 1 bedroom (ensuring it has a decent sized bedroom). No niche markets with this purchase, you will attract a large number of tenants, whether it be a couple, well off single, or even students – wide range. Especially, having just read that household sizes have dropped considerably from 5 to 2, thats a big drop, therefore 1 bedroom should do well.

    I think if you were to invest in a 1 bedder inner city, if possibly, try and at least secure it with a carspace, obviously widens your rental market even more, having competitive advantage over those in which do not have a carspace.

    Follow the market, follow the demand! (ie. rental shortgage increase, household size drop)

    Profile photo of KRH83KRH83
    Participant
    @krh83
    Join Date: 2008
    Post Count: 47

    Hi Natalie,

    yeah i think i'd definitely need to go for one with a car space. Thanks for your input, it all helps get everything into perspective! I'm just worried about the high strata fees for these apartments but i guess if the rental income is high enough, it will cover the strata fees and hopefully still present good cashflow.

    Profile photo of nataliebransonnataliebranson
    Member
    @nataliebranson
    Join Date: 2009
    Post Count: 31

    Of course!! You are going about it the right way, researching and getting opinions.

    I dont think you can go wrong inner city, generally attracts the higher rental returns. The fees wont really be too much of an issue, dependent of course on the loan amount you take out vs the rent coming in. (positive/negative gearing)

    I am also looking at inner city 1-2 beddies, and the rent will by far be covering the mortgage with a surplus. Try and find one near a UNI – that helps! You will generally get the students in and out, and willing to pay for the luxury of living close to UNI.

    As you said, definitely try for a carspace, however I guess this is debatable…. I mean, if you live/work in the city, what is the need for a car? I guess, it is much better to purchase with a carspace to have that peace of mind, and no regrets of the purchase…

    Lots to consider K, im learning as im going also… As I just purchase, and looking to buy another inner city as I mentioned. I am in a similar boat as you, in terms of knowing where to purchase.

    Profile photo of rhettwrhettw
    Member
    @rhettw
    Join Date: 2009
    Post Count: 6

    I normally look for a 2 bedroom as a minimum, in perth there a currently on over supply of one bedders and therefore they are harder to sell. Defenitely look for a unit or townhouse which has an allocated car space especially if its located in inner city as this could be a deal breaker for renters/buyers.

    Good luck with your property search =]

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