Am always hearing 2 sides to wether to invest in units or houses. Units apparently are in high demand yet you buy “land” with a house. Am actively looking for an investment property (or two). Any feedback?
Also opinions on auctions – find it quite daunting with no cooling off period. Is an auction mainly to the vendor’s advantage??High demand = location.
You could buy a unit in a rural area and still not find any tenant for a good month.
Generally speaking as you know, unit = better rental yield, while house = capital growth..so it depends which strategy your after.
Lastly Demographic of the area makes a big difference! does the location have a demand for unit or houses?
Example: Parramatta NSW.Typical demo – Students, single and young family with max 1-2 kids ( as per ABS) + close to public transport only 40% has a car.
So buying a 3 bedroom house may not make sense as investing in a 3 bedroom unit; given the return for Parramatta. On the another hand the suburb next door (1.1km) Granville is still not developed and investing in a land makes more sense in term of land value growth .
Summary- work with the location.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
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Researching the location is the key. See what demographics there are.
With units its can be easier to give them a quick reno rather than a house.
I was recently at seminar where most of the investors had bought units rather than houses. I think it is good to have a mixture.
It also remains pertinent to realise what your mix of demand is.
In a high load area with lots of jobs .. lots of transient workers … you'll find a strong steady demand for units and studios.
In an area where there arent many units and lots of land .. the demand for houses will be stronger.
In an area where land is now pricey and there is convenient transport, units will be more in demand.
In an area where hospitality and tourism remain major drawcards .. both unit/house prices will suffer in the low demand/ off season.
And the important thing to realise is that as the area changes .. so does the demand on certain types of properties over other types. This is why a demographics search is so necessary when working out your best decisions.
Thank you everyone for the great advice and feedback – well noted and appreciated.
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