Author: Peter Gianoli, General Manager, Investor Assist.
When I joined Investor Assist in 2011 to start up the investment business within the ABN Group, I was excited at the prospect of offering land and house investment opportunities to clients because I strongly believe in the quality of the homes being built across the Group and the value for money they represent for those looking to get into the house investment Australia has to offer. I would encourage our clients to invest in houses.
This being said, my background is predominantly in selling investment apartments (both off-the-plan and completed) and investors are always asking me the question – is it better to invest in houses or should they start buying apartments for investment? And my answer is always the same. There is no wrong answer. Both offer their advantages and disadvantages so in the end it will come down to your personal circumstances and what best suits your individual investment objectives.
Houses have the element of land that a property investment apartment lacks, and houses usually experience greater capital growth as a result. To invest in houses comes with larger structures and gardens that require more ongoing maintenance compared to buying an apartment for investment and there is usually a greater perception of ‘space’ and separation from neighbours in a house compared to apartment living.
Although buying an apartment for investment requires less maintenance, which is mostly taken care of by the body corporate, investment apartments are subject to body corporate, fees which must be considered when calculating the overall investment merit. Property investment apartments also tend to occupy the high-yield category of investment, since the ratio of rent is typically higher than that achieved for house investment. This may be ideal for investors who require a high level of cash flow to supplement their loan repayments.
Property investment apartments are usually built close to the CBD or in built-up locations so there is often high demand from tenants who place a strong emphasis on lifestyle or living close to work. However, it is important to note that if you are buying off-the-plan not all investment apartments come into fruition if pre-sales are not met and this is often the case for larger high rise projects although smaller developments may also suffer the same fate. It is important to do your homework and carefully research the developer, design, quality and location before you think about buying an apartment for investment.
If you are looking at buying an apartment for investment off-the-plan, it also pays to explore a number of smaller considerations. For example, it is wise to investigate who will be the provider of electricity. Since the provision of power became privatised, many developers have seen the potential of on-selling the provision of power to the property investment apartment in the complex, and in some cases, this has resulted in strata companies having to impose special levies to resolve old unpaid bills. As an investor, every time a special levy is raised, the return of your investment apartment is minimised.
For the inexperienced investor, you can’t be expected to know to ask these questions so that is why the support of Investor Assist can really help you during the investment evaluation process. We know what questions to ask and in most cases we have already done the homework for you so we only recommend that you invest in houses or apartments where there are no hidden costs or disadvantages.
To make the process easier, I am pleased to advise Investor Assist is now in a position to offer investment apartments as well as new or some of the best completed house investments Australia has to offer, which is great news for investors. This is because we have established ABN Realty which enables us to sell properties on behalf of third parties outside of the ABN Group so we have taken the time to do the research and we have hand-picked a selection of property investment apartments which we believe have excellent investment potential. In fact, they are some of our top recommendations.
For further information or for help choosing between a house or an apartment, speak to an Investor Assist Property Specialist today on (08) 9200 7200 or email email@example.com
View some of the investment properties currently available.