hi everyone,
I am new. I would like to get more people advice. for investment, Unit , Townhouse and house, which one is better to buy?
I have enough cash.
thanks
Where are you looking? Suburb? Price range?
Hi Kenny Chlorine – great name!
You need to do some homework. No-one can answer your question as it stands because there are a lot of factors that may determine which is the best buy. A house may be best in a certain suburb, but a unit in another.
Also depends on what it is you want to do with your investing. Some investors only buy houses, others concentrate on units, both for different reasons and both strategies work for these investors.
As a rule of thumb though, land is what goes up in value while the dwellings go down, so without knowing anything about what you want to do, I'd say houses with as much of a land component as you can afford may be best. Preferably the lowest value house on the biggest size block of land ( and in the right area ).
This way you can start by either renovating the house and renting it out for the maximum you can and look at the potential of the block down the line. Either subdivide and onsell and pay down the house, subdivide and get plans and permits to build and then sell to a developer or look at developing the block yourself in the future. At least you have some options here, which don't exist with a unit or townhouse.
Ian
Free Property Investment Info. Tools & Resources for Investors … with a Sense ofumour.
i'd agree that i'd prefer houses as investments due to the potential increases in the land that come with it
It really comes down to wear you are buying. Frankly I would rather buy a townhouse in an inner city area rather than a house in the outer suburbs. There is a mistaken view that a house with land is a better investment. The reality is the land the townhouse sites on in an inner city area is far more valuable based on a per square foot price. than the land of the outer city house
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
It all depends on requirement,capacity and saturation of the markets.
A unit is great l if you want a low maintainence asset that returns reasonably well proportionate to outlay. It has no backyards to maintain, and it has usually got low overheads.
A townhouse is great for fulfilling the needs of working families with the possibility of kids. It very much caters for a middle class working income or shared support (student or sub-letting). Remember this when investing in the area.
A house allows maximum storage .. gardens .. backyards .. and if its in a reasonable position within close range of the business districts (since shopping centres came into existance .. centrality is no longer as important), it allows further growth through ongoing subdivision. However it is also the highest maintenance option.
Now note the first line i wrote at the top .. and thats your market. There must be a requirement for your property, it must be satisfying the rental or purchase requirements of the purchaser or tenancy. Now the last one is the most important .. it must be a demand in the market. If there are too many of one group of properties and not enough demand .. you may find that your property remains undesirable or untenantable for extended periods of time. Happens a lot more with commercial, but in failing towns .. centrality to convenience and quality becomes pivotal in getting tenants.
As others have mentioned all have their pros and cons and it is impossible to claim that one trumps all.
I agree that their is a general misconception that property with the highest land component will always be the better investment. This is not necessarily true. It all depends on the market and what the demand is for this properties. Remember even when buying apartments and units you are buying land component which although is smaller will most likely have a higher price per square meter as it is most likely closer to the city/ in a better location.
As Aaron mentioned above – where are you looking and what is your budget. In some places if the demand is there inner city apartments and townhouses can experience far greater capital growth than outer suburb houses.
There is also the fact that apartments and townhouses will be less maintenance, however there will be a body corporate to accompany these.
You may find a huge demand for quality apartments in inner city locations sought by a young working force, etc.
It is probably worth mentioning that the demographic trend in australia is an older population with a significant increase in smaller persons households – this could lead to a greater demand in some areas for units and townhouses. However on the end of the spectrum places like the Gold Coast are experiencing a gross oversupply of high rise apartments and these will lag the real estate listings for many months.
Basically as I have rattled on it depends on the demand in the area, any of them can be the better investment in a specific area – if there is a demand for something its value will increase until additional supply is created or another alternative presents itself.
Nigel Kibel wrote:It really comes down to wear you are buying. Frankly I would rather buy a townhouse in an inner city area rather than a house in the outer suburbs. There is a mistaken view that a house with land is a better investment. The reality is the land the townhouse sites on in an inner city area is far more valuable based on a per square foot price. than the land of the outer city houseYep. I was surprised when I got my land tax bill. My 28sq unit in the city has a similar land value as my 600sq land house in the suburbs.
The question is too broad to provide a 1 2 3 answer.
The answer is- it depends. I have all 3. I buy for the deal, not whether it's a house, unit or villa. If the numbers work I buy it.Catalyst wrote:The question is too broad to provide a 1 2 3 answer.
The answer is- it depends. I have all 3. I buy for the deal, not whether it's a house, unit or villa. If the numbers work I buy it.Perfect response. I was just about to provide the same until I read this.
It's all about the numbers – providing the type of dwelling fits the demographic for the area.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
nice discussion..
thanks xdrewCatalyst wrote:Nigel Kibel wrote:It really comes down to wear you are buying. Frankly I would rather buy a townhouse in an inner city area rather than a house in the outer suburbs. There is a mistaken view that a house with land is a better investment. The reality is the land the townhouse sites on in an inner city area is far more valuable based on a per square foot price. than the land of the outer city houseYep. I was surprised when I got my land tax bill. My 28sq unit in the city has a similar land value as my 600sq land house in the suburbs.
The question is too broad to provide a 1 2 3 answer.
The answer is- it depends. I have all 3. I buy for the deal, not whether it's a house, unit or villa. If the numbers work I buy it.Ditto I have a unit and when I got my land tax bill it value was the same as 4 of my houses.. But the yeild is crap on the unit. It depends on what you are trying to acheive as to what MAY be the best investment.
One interesting trend of recent years is how strata properties have done well on a relative basis compared with houses, this is driven by people being prepared to give up land size (not necessarily the same thing as land value) for proximity to work and lifestyle choices.
There is no correct choice as others have pointed out, all depends on where you want to go and how you think you are going to get there in an investing sense.
When working with client criteria we refer to the three golden criteria you need to carefully weigh up and evaluate.
> Budget for purchase
> Housing style (house/townhouse,villa/apartment)
> LocationDepending on how you rank these choices you make the other criteria adjust to suit.
Generally you have to be very flexible on at least one of these criteria, for example if you want a house in good condition and have 300k for a budget then you aren't buying <5k from the Brisbane CBD. If you want as close to the CBD as possible and have a 300k budget then the criteria that needs to flex will be the housing type.
I might as well weigh in on this one too.
My thoughts on houses are:
I am not a big fan of a large backyard if it does not earn its keep. Do I really want to pay bank interest on a bigger mortgage for a backyard that does not earn extra rent? No. However if the backyard is a wee bit bigger and could accommodate the construction of an additional dwelling, well that's a different story.
Always remember with units to factor in body corporate fees – how much are they, and are they likely to get hiked up a lot for no real reason? Also factor in your personality… if you are not into sharing and having a meeting with others about whether or not you are allowed to paint your own fence, then perhaps a property in a body corporate is not for you.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Where are you looking? Suburb? Price range?
Hi Kenny chlorine,
I am also new to this site and I was going to ask people what they thought would be the best type of IP to look for, ie type of building, amount of bedrooms etc. etc, but your query has brought some great responses which should be considered.
I guess it's down to the investor to decide what meets their needs.
Nice question !
As a new member to this site I am very impressed with the quality and volume of feedback.
My thoughts on this question, I can only go on my own experience.
I have a small 63 m3 unit in a complex of six. Rent doesn’t quite cover mortgage repayments, I tip in $500 a month, I also have quarterly rates, water and body corporate fees. As a cash flow positive property this unit is not ideal, however, it does have very strong capital growth as it is located very close to Brisbane cbd. I would keep this property for a long term gain.
There is some great feedback for you to consider with all the other posts.
Just remember to do your due dilligence, identify what you are after, cash flow or capital growth, focus on what you are after and have confidence that you can make a good sound decision.
And go for it.
All the best.
Danny
You must be logged in to reply to this topic. If you don't have an account, you can register here.
