When thinking about what to invest your hard-earned money in, you want to pick something that will get you the most ROI. Everyone wants to make money from their investment. When you have made the decision to invest in property, the next question is “Should I invest in a house with a backyard or a one bedroom apartment?” The answer is never a simple ‘yes’ or ‘no’, but rather ‘it depends’ – it depends on the property, it depends on your budget and it depends on the location.
Investing in a stand-alone house
Houses have better potential for growth. Land will always appreciate and there is more land attached to houses than apartments. Land is also in short supply. In following the principle of supply and demand, this means that good growth follows.
There is also a greater capacity for development. It is possible to increase the market value of a house through decorating, landscaping, extensions and remodelling. The same scope for improvement is not present in an apartment. And there is potential to sub-divide, cross lease or sell a well-located property as land becomes more sought after.
Investing in an apartment
Apartments have cheaper maintenance costs than the upkeep of a rental home. They are easy to rent with the draw of inner city living, transport efficiencies, easy care lifestyle.And there is less investment capital required when compared to a house.
Which one suits your investment portfolio better, a house or an apartment? Some new investors think that choosing a house is ‘essential’ in building their investment portfolio. This is not the case. It depends on your investment strategy – how you want to invest and what you plan is with the properties. You may find that you can build a portfolio faster with apartments than what you would do if you concentrated on houses alone.
What is your investment strategy? Will you buy houses or apartments for your portfolio or a combination of both?