Advantages and Disadvantages of buying a house as a property investment, over a unit.
As a qualified real estate agent, buyer’s agent, real estate valuer, and experienced property investment advisor I have valued, bought, developed and property managed many homes and units for property investors all around Australia.
Below I have outlined the advantages and disadvantages of purchasing a home as a real estate investment as opposed to a unit, villas, apartment, townhouse or condo.
Buying houses/homes as a real estate investment
Disadvantages
- More upkeep is vital to support the asset (which equates to higher continuing costs and therefore fewer cash flow is experienced from that particular property investment)
- Conventionally lower rental returns due to larger land factor
- Easier to over capitalise on add value ideas, so need to be a knowledgeable property investor who comprehends the detail and method of property development and renovation before starting. This can be quite expensive in time as well as money.
- Houses are not as common as apartments in inner city locations which is where the higher capital growth is usually experienced.
Advantages
- Commonly in lower concentration areas
- More lifestyle space (yards, entertaining rooms etc.)
- Further privacy than a apartment
- Artistic control over the entire property, and thus renovation and property development more easily achievable and therefore capital gains on renovation or development spend as opposed to units/apartments.
- Generally greater land content is preferred for capital appreciation
Hopefully this helps you start to form an opinion on what best suits you whether it be for buying your next home, your first home or a property investment. For a more solid opinion and comparison of houses versus other types of real estate investment please visit our website.