— Property

What is the Best Investment Choice

When it comes to investing in real estate, several tough decisions need to be made. Like all decisions, each option will come with its own advantages and disadvantages. One of the most significant decisions you will make as an investor is choosing the type of property you want to invest in: a house, a unit, or perhaps even a townhouse.

Generally speaking, most investors who purchase a unit will do so as they have a higher yield and are easier to hold onto. Whereas owner-occupiers are more likely to buy houses as they are more significant and a great place for families to grow. To make the right decision for you, it’s essential to understand what you are trying to achieve with your investment and understand the pros and cons of each option.

Investing in Units:

Pros

Units are often more appealing to investors because they are cheaper in their initial price and generate higher rental yields.

The lower initial costs make them easier to purchase and to manage repayment costs as a rental. The income is often higher in comparison to the mortgage repayment price.

Generally speaking, many units can achieve 4-5% yields, while houses in comparable locations may be under 2%, which makes units as an investment very attractive.

Another advantage of purchasing a unit is that it provides the opportunity to buy into a highly sought-after area which may have been otherwise unaffordable if an investor was looking at houses only with the same budget.

Many inner-city metropolitan areas close to water or amenities are often priced well over $1 million in almost all states in Australia. Comparably, units in the same site can be under $500,000, which is far more affordable for an investor who might be on average wage with limited serviceability.

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