Hi this is bellboy and this is my 1st post!
Am looking to purchase and self-renovate my first investment property, which I am thinking of renting and keeping. Then borrowing against that for my second, third and so on. Could anyone suggest to me if I should go *house* or *unit* and the reason why. I am situated in Cairns Queensland, where property prices are still very much on the move upwards. I have a grand total of $250,000.00 cash available, full stop! Should I use this as full payment or go out on a limb and borrow? I can presently buy grubby small units for about $90K and grotty little houses which a year or two ago sold for about $100K but now fetch about $200K. House or Unit which way to go? Any and all comments much appreciated. Thanks from: bellboybellboy- heya
)I have only units, but I think most people on here might tell you that houses are the way to go.
The theory is that houses or units- whatever is on the land- is a depreciating asset, whereas the land is an appreciating asset. Market variations have often found this to be the case. One thing I would say though is… depends on where it is. In rural locations, you can still pick up blocks of land for a few thousand dollars, so land is not always hugely valuable.
Basically, on a house, you’ll pay rates only, whereas on a unit, you’ll pay body corporate fees and rates, and the BC fees can be huge, depending on what’s in the complex- pools, lifts and gyms costs a lot to maintain/upkeep. You may also have to pay a special levy at some time (or many times) during your ownership, if there are maintenance costs, such as painting, renewal of equipment, or some such event.
If you but a house, you are your own boss… if you buy a unit, you socialise the management, so you can have people on the Body Corporate who attend meetings, and either want to spend, spend, spend… or conversely, want to let the units fall into ruin. So there is less individual control of your asset.
I always take BC fees into considerable account when I buy a place, and I check all the BC minutes to see what I am buying into, before I sign a contract. I like to know if there’s any drama that is gonna befall me if I buy. Usually BC minutes will say if a special levy is proposed.
You’ll notice, if you look at Australian Property Investor magazine, or other median prices, that units are generally (although usually always) less pricey than their house counterparts. Depends on what you want to do and can afford.
kay henry
Thanks for that kay henry. Much appreciated. I would never have thought to look up BC minutes prior to the purchase of a unit. And as you say with houses you dont have any BC drama! I will wait and see if I get some more replies before taking the plunge. At this stage I am still thinking Units because I am good with a hammer & nail and paint brush but dont have a green thumb to be doing landscaping/gardening etc! Cheers from: bellboy.
bellboy,
You also have to get permission from the BC if you are gonna tear down walls and stuff in a unit :o)
kay henry
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