Hi all,
just trying to distinguish between flats, apartments, units and houses in terms of investing. I understand that purchasing a property is about the land. The building on it (if there is) may play a part, but is more a bonus.
Therefore, i would assume that flats aren’t a good investment option. Flats would have no land value as, if you have a storey above or below, you can’t rebuild or sell part of your land.
I’m not too sure the difference between units and apartments. I see them both as being multiple small apartments/units on large blocks of land. Once again you can’t really knock down your unit/apartment as there are others on teh block of land… not really sure about the differences… also with regards to the body corporate and its uses…
Houses are obviously the best option but are also the most expensive… thats the reason i have to look at the others initially…
Any feedback or points that i have missed would be greatly appreciated.
kind regards,
Giladgilad,
There are more assumptions in your post than you may be aware of. Maybe one flat isn’t a good investment, but what about a whole block that you can strata title? Would you say know to a postive cashflow apartment? What about a commercial building where you didn’t even own the land it was on, but which returned 15%
Deals aren’t good by their nature, but by their numbers. There is at least a qualitative difference between residential and commercial, but it all comes down to the bottom line and your aims in investing.
Without defining these for yourself, you can’t answer your own question.
gilad,
Your assumptions about flats is too broad.
I find nothing wrong with 3 flats returning $330/week for $120k outlay, or a house divided into 2 flats (3 bdrm & 2 bdrm) returning $285/week for outlay of $120k, or even 3 flats (4bdrm,+ 2*2 bdrm) returning $364/week for outlay of $187.5k.Or how about 4 strata units returning $450/week for outlay of $250k
Think outside the square mate.
Cheers LenCamder is absolutely correct, there is no “one best type of property”. It all comes down to personal preference and for many people, returns.
If you prefer houses, so be it, but at the end of the day it’s usually a case of what your investments can do for you and your financial future!Flats do have land content, though usually not as much as a house. A block of units in a great spot could have a lot more land content than a house at Woop-Woop.
Good Luck.
Depending on which unit or apartment and Gilad ersonal financial requirements, in the case were Gilad needs an investment without too much to worry about and a low entry point, maybe strata titled investment like an apartment or flat is the better option.
If you think your paying too much in tax ect, than a new or refurbished property is your best go.
There is no one rule to fit all.
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auHi,
While everyone who has answered above is correct, I will answer in the general case.In general, all other things being equal land apreciates in value while buildings depreciate. That means houses, with thier sole control over a relatively large block of land will provide a stronger long term investment. Given a flat and a house at the same price in the same location the house would be the better buy.
However, as stated this scenario is rather fanciful. A flat is generally cheaper and generally gets a better yield (generally). This is pretty much entirely due to the land value attributable to the flat. If you had two properties, one returning a reasonable yield but little capital gains while the other had a relatively low yield but high capital gains then it comes down to purpose of investment.
If you buy a flat so you can use it’s equity as leverage for further investment (say shares or what not) you may be let down.
I personally prefer to buy land because I like getting my hands dirty. I like to interact with my investments in person and I like to take control of their growth if and where possible. That’s why I like being able to do gardening, painting, cleaning, developing and so on (demolishing is fun too). I like the feeling of ownership that comes with holding title over land. I also don’t mind the negative cashflow associated with the early stages of this form of investing.
What do you like? What do you want your investments to do?
Flats or houses. Toss a coin. With flats less maintenence issues, easier to buy into and higher return generally. With houses, more flexibility to renovate/develop etc and there are only so many houseblocks in desirable locations so potentially higher growth. Flats are probably better suited to less experienced investors, although individual circumstances can vary.
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