Hi all,
My wife and I were having a discussion the other night about the best way to proceed in our property investing. We are both agreed on the strategy we want to take (CF+). What we're uncertain of is the merits of a house versus a unit. Currently we are open to both options but are not quite sure what to make of it. Will the preference for a house or unit depend on the suburb/area or are the similarities/differences pretty much the same across the board.
Regards,
Andrew
itsandrew
Go as far as you can see and you will see further.
rental yield is dependent on lots of factors, suburbs, location in the suburbs, condition of the property etc.
generally units has higher yield than houses, but in outer suburbs there's no units, only houses, so there's no comparison.why does it bother you it is a house or unit? in the end u want something that makes money for you.
Thanks Dan,
It doesn't really bother me which one we go for if the benefits or drawbacks are pretty much the same for each option. The only obvious thing for me is if we went for a house there may be develpment potential that's not available with units. However, develpopment's not our desired strategy at the moment.
I appreciate the point you make about yield and units. Very helpful.
Andrew
itsandrew
Go as far as you can see and you will see further.
It's all about figures. Make sure you have a good piece of software that lets you enter all the relevant data. Then just let the $$$ decide which investment is best for you. You should be taking all emotion out of your decisions and focusing solely on the profits. As I'm sure you know, the other thing to remember is that you can manufacture $$$ in your investment to ensure positive cashflow with things like renovations, subdivisions etc.
Most financial advisors highly recommend diversification across your portfolio, I agree with RnP, at the end of the day it does come down to the figures. However one thing you may consider is that if your portfolio is dominated by houses, maybe purchasing a unit is a minor form of diversifying?
Just a thought.
Shane
Scratch Property
http://www.scratch.net.auRnP wrote:It's all about figures. Make sure you have a good piece of software that lets you enter all the relevant data. Then just let the $$$ decide which investment is best for you. You should be taking all emotion out of your decisions and focusing solely on the profits. As I'm sure you know, the other thing to remember is that you can manufacture $$$ in your investment to ensure positive cashflow with things like renovations, subdivisions etc.RnP (or indeed anyone) – what is a "good piece of software" for this type of thing? I'm not aware of the options
Scratch – I also like the idea of diversifying in property but I hadn't thought of it like that.
Andrew
itsandrew
Go as far as you can see and you will see further.
Some factors to consider with units:
*usually have to pay strata fees, make sure you know what these are upfront and budget them into your rental returns. paying $500 a quarter can make a dent in that rental income!
*the strata fees include building insurance, so you are saving $$ with this, and I suppose in most complexes includes garden care
Perhaps its best to research your areas and figure out your finances before choosing house vs unit. Who do you want to rent to? What is in demand? The preference for house vs unit will definitely vary with the location, as will the tenants.
Do you want to purchase a house near a university, could be rented to uni students. Or a suburban house walking distance to shops and primary schools ideal for a young family. Or an apartment close to public transport/the city for young exec workers?
Get your budget first, then start your research into good areas and see what's in demand.
Something you can do is if you find a location you may be interested in, go and meet with a property manager in that area and ask them what properties are in demand by their tenants and if there is an oversupply or undersupply of any one type.
Cheers,
Emma
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