Once you know your budget and you have a property investment strategy, we believe each property should be considered on its own merit, and what boxes it is ticking on your property investor tick list.
For instance, will that city apartment with superb views give you the same return as a house with more rooms, which costs less, in the suburbs? Are you looking for a property to do up and sell on, to increase capital gains, or do you want a property to give you an income?
To help with your planning process and to understand what the different properties can offer, here are some points to consider when buying a house or unit:
Buying a house as an investment property:
Houses frequently come with off-street parking and a larger open space. Because of this, a house typically attracts families.
The benefits of houses
- You own the house outright, so there are no strata rules or fees to factor into your budget.
- They offer more options to upgrade the property and (hence increase rent and value), such as adding another room or granny flat.
- Families tend to stay longer, so there is the potential for lower vacancy rates.
The drawbacks
- When looking at the same location, houses tend to be more expensive than a unit.
- You are responsible for all the maintenance.
- Attractive as a rental property to a smaller audience.
Buying a unit as an investment property:
Units and/or apartments tend to be smaller, with less open space, and if offered, tend to only have parking for one car. Renters tend to be single, or couples, or friends.
Benefits of Units
- Often cheaper than a house of a similar size in the same location.
- The strata corporation is responsible for all the external and communal maintenance.
- They may offer a higher rental yield.
- Tend to attract a wider audience as a rental property.
The drawbacks
- Strata fees are an ongoing expense, and can regularly increase.
- You may have to get approval from strata for any changes or major renovations.
- They may not make as much capital gains as a house.
Many property investors have a mix of properties in their portfolio; the important thing to remember is to do your budgeting, know your finances and know what is and isn't tax deductible. For instance, for a unit, strata fees will be tax deductible, and in both cases, you'll find many of the maintenance costs can be claimed back. Speak to a financial expert who can advise according to your financial situation.
The other point is to be flexible. You may think you want to invest in a unit, but then find a house which ticks all the boxes.
Once you're happy with your purchase, the most important thing is to make sure it is managed properly, and you are getting the maximum return for your investment.
This is where we come in. From finding tenants and managing maintenance, to handling the paperwork and communicating with tenants, we manage every aspect of your property, so you have the time to do what you want to do.
As one of Sunshine Coast's longest established real estate offices, we know property. Whether it is from an investment or homeowner's point of view, we're always looking at innovative ways to help you get the best from your asset.