If you are starting out in property investing you need to keep an open mind. When you think of property that you might want to invest in, you probably automatically think of 3 or 4-bed stand alone house with a large back yard in a good suburb that is located near amenities.
But there are other options and they may in fact work better for your situation than a stand-alone dwelling.
Have you considered an apartment in a high-rise closer to the centre of town?
Advantages to an apartment:
– Usually lower in maintenance costs than a house. On the other hand if you purchase several apartments in one block, then it becomes cost-effective when maintaining all of them at a the same time.
– Higher rental income is often a possibility, due to the proximity to the center of town and the added benefits of a gym or pool in the apartment building.
– If you own more than one property in the apartment complex, you might be able to have better leverage for future property purchases.
Avoid at all costs:
– If you don’t know the market then you are sunk. You need to know the area that you are looking at buying in and become an expert. Who is living there? How long do they stay in the area? Who is likely to be your tenant? What do they like? Where do they work? Where do they go after they leave you?
– Timing – as in bad timing. If you know the market and have the right advice from the right people, you will know when it’s a bad time to buy.
– Not knowing ALL the costs. Do you know all the costs and fees involved? Car parking, storage fees and ongoing annual fees. Make sure there are no surprises and that you factor these into the costs.
– Bad management. Who is going to manage the property? If you are, do you know how to do it? If you are going to employ a property manager, make sure you employ a reputable one – we are not all built the same.
As our population grows, so does high density housing. This means that if you are considering buying property, it may in fact be a smart idea for you to consider an apartment to add to your investment property portfolio.