Looking at buying your first home? Or are you a keen investor looking for your next property? The main question both buyers and investors are finding themselves asking is, “Should I be buying a house or an apartment?”. There is honestly no correct answer to this question, it is completely dependent on you and your situation. However, here are some things to consider before purchasing a home or investment.
In some areas apartments are more affordable than houses, however, if you are willing to sacrifice location, you may be able to find a small house for a similar price. The general rule of thumb is, those properties closer to the city centre are more pricey, and the further out you go the more bang you get for your buck. You also have to factor in your budget and what monetary amount you have gained pre-approval for. What type of property can you afford? By having pre-approval for your loan you can get a good understanding of what is within your means and you will be able to refine your search and find the perfect property for you.
It is also important to assess what type of property will best suit your lifestyle. Are you a workaholic who likes to be close to the city and public transport? Or would you much rather have more space, a backyard and a more community feel? You will also want to think about your future before you make the big decision, be sure to factor in things such as children, pets, school catchments and job prospects.
LAND AND DEVELOPMENT
The benefits of owning a house over an apartment is that you also own the land that your property sits on, and land appreciates as the population increases. Apartments, on the other hand, depreciate over time and need constant renovation and upkeep. If you are also wanting to purchase a forever home and have plans to renovate in the future, houses have more potential to do so.
THE PROS AND CONS
Houses generally command better long-term capital growth and more favourable growth patterns, which is great for owner-occupiers. They also offer more flexibility to renovate, upgrade or extend, which is especially good for those who are looking to stay put for a while. In a house you also have a bit more privacy as your neighbours are a bit futher away. Due to this, houses and large properties are more costly. Apartments, on the other hand, prove to be a great investment as they tend to generate better rental yields, especially in inner-city areas. When purchasing an apartment as in investment it is important to choose wisely, as undesirable apartments have a tendency to stay vacant for longer periods of time.
As an investor, it is important to weigh up the growth versus the yield. It is also important to assess the area or location that the property is in. Are more renters in this area looking for apartments? Or does the area cater better for young families who require more room?. Be sure to do your research before buying an investment property. It is vital to look at the recent market trends to find out the supply and demand for a certain type of property within the area you are investing in.
Statistics show that in the 5 years leading up until 2018 the housing market has been outperforming the apartment market. Buying and investing trends showed that both the growth and demand for houses was stronger during this period. As the housing market changes and fluctuates, we will then see a higher demand for apartments. As an investor or home buyer it is important to do your research and weigh up what would be the best choice for you and your situation.
Essentially, there is no right or wrong answer when it come to buying a house or an apartment. It is dependant on you as the buyer/investor.
iThink Property has a team of real estate agents in Ipswich and Toowoomba offering property sales and property management services. With a passion for people and property, iThink Property was conceived with the notion of building a team of good people to work in a real estate brand that did things differently. iThink Property focuses on transparency, communication, innovation and teamwork and has become a leading independent brand with unique points of difference. So whether you are thinking of buying, selling or renting, think iThink Property.