Are you buying your first home, or are you a keen investor looking for your next property? The question both buyers and investors are asking is, “Should I be buying a house or an apartment?” There is honestly no correct answer, it is dependent on you and your situation. However, here are some things to consider before committing to an investment.
In some areas, apartments are more affordable than houses, however if you are willing to sacrifice location you may be able to find a small house for a similar price. Generally, properties closer to the city tend to be pricier, and the further out you go the more you can get for your money. Factor in your budget and how much credit you have gained pre-approval for. By having pre-approval for your loan you can gain a solid understanding of what is within your means, refine your search and find your perfect property.
What type of property will best suit your lifestyle? Are you a workaholic who likes access to the city and public transport? Or would you rather have space, a backyard and a community feel? Think about your future before you make the big decision and be sure to factor in children, pets, school catchments and job prospects.
LAND AND DEVELOPMENT
By owning a house, you own the land upon which the property is located. Land values tend to appreciate as the population increases. Apartments, however, may depreciate over time and require constant renovation and upkeep. If you want to purchase a home and have plans to renovate, houses have more potential.
PROS AND CONS
Houses generally command better long-term capital growth, which is great for owner occupiers. They offer more flexibility to renovate, upgrade or extend, which is especially good for those who are looking to stay put for a while. However, because of this, houses and large properties are more costly. Apartments can prove to be a great investment as they tend to generate better rental yields, especially in inner city areas.
Several factors are at play when considering whether to be an investor. Weigh up the growth versus the yield. Assess the area or location that the property is in. Are renters looking for apartments? Does the area cater better for young families who require more room?. Be sure to do your research before buying an investment property. Look at the recent market trends to find out the supply and demand for a certain type of property within the area you are investing.