Should I invest in an apartment or house?

We are lucky on the North Shore: the quality of both houses and units is high, and there’s a range of both to choose from. So if you are considering investing, which is the right choice for you?

1.

Your price range

Your budget will dictate the type and quality of property that you can afford. It will also mean that you could afford different kinds of property in different locations.

For example, currently, a budget of just over $900,000 might buy you a lovely apartment in Lindfield, but just more than $1 million would see you set up a house in Hornsby Heights. Rental returns would reflect this.

A lower mortgage can also mean that income from rent will fully cover the repayments.

2.

Upkeep

Many investors believe that apartments involve less upkeep due to their smaller floor plan and limited outdoor areas. A recently renovated apartment can also be the perfect property to “set and forget” as an investment.

Meanwhile, houses might require more upkeep depending on their condition and age, particularly if they have a yard.

3. Ongoing expenses

It’s also important to consider the ongoing expenses of a new investment property, which can differ between houses and units.

Council rates are often higher on houses and most investors will be subject to land tax. These are usually due annually, while apartments, townhouses and units often have strata fees due quarterly.

Some investors also prefer owning houses as all maintenance is their own responsibility and they don’t have to pass modifications through a strata committee, while others prefer owning a unit because the strata supports some repairs and takes the headache away from landlords.

4. The intention of the investment

The larger land size for houses means that they tend to increase in value at a higher rate than apartments. Investors who plan to renovate and sell quickly, or who are uncertain as to the intended length of their investment, might benefit from the purchase of a house.

However, investors who plan to hold onto the property for a long time might prefer an apartment, as returns can increase as different locations become more sought after.

It’s also worth considering the new strata laws which allow for full apartment blocks to be sold to developers if 75% of the strata consents. This is good news for investors and might increase the appeal of purchasing units in less modern blocks.

Houses and units are both in high demand right now, especially on the North Shore. Whatever you choose, we can help you make the most out of your investment. Get in touch with our team today.

Disclaimer

DiJones Real Estate, together with their directors, officers, employees and agents have used their best endeavours to ensure the information passed on in this document is accurate. However, you must make your own enquiries in relation to the information contained in this document and seek advice from your financial advisor, broker or accountant to ascertain its application to your circumstances.

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