If you have been considering whether you should enter the housing market to buy an investment property, there are plenty of factors you have to keep in mind. Perhaps the biggest is exactly what type of property you're looking to buy – you could either purchase a house, which stands on its own, or a unit such as an apartment, condominium or townhouse in a larger building or development.
Of course, when making such a decision and trying to determine which will be the better investment, you have to take a lot of factors into account, including the following:
Perhaps the most important aspect of making such a decision is determining what you can actually afford to purchase. In general, you would certainly consider buying a free-standing house to be more expensive than buying a unit, but at the same time, a unit in downtown Melbourne is likely to be more expensive than a house in a suburb two hours outside the city.
Consequently, you need to crunch the numbers and determine what you can actually afford, because that will inform a lot of your other decisions later.
As mentioned, you may need to consider whether you want to buy in or near a large city, or whether to move out to the suburbs or even rural areas. Obviously with rural locations, demand can be limited, but it may also allow you to buy a larger property. Of course, the opposite is true in many cities – demand can be high but the size of the space you'll be able to buy is limited.
You will also have to factor in other considerations for picking the right location, such as proximity to public transit, the quality of schools, the number of amenities, how many cultural locations are in the region and so on.
When you own an apartment or condominium in a suburb, demand is going to be quite a bit different from what it would be if the exact same unit were located in a city. That's true not only in terms of what people can afford, but also the kinds of amenities they're looking for. People in a city may not prioritise having a backyard of their own, for example, but it might be a critical consideration for a home in the suburbs.
When you own a unit, the ongoing cost of ownership may be relatively muted, as you might not have to pay for fixtures to be repaired or replaced, and might only have to worry about taxes and other expenses associated with owning any property. However, if you own a house, you will be responsible for almost any costs related to upkeep. That needs to be factored into your long-term calculations.
In some parts of Australia, rental properties are extremely common and you may have a good idea of what your offering should cost to make sure you consistently have a tenant. This can be more difficult in other areas where renting is less common, but that might also make your property stand out.
Because you are buying this property as an investment, you will need to think about all of the above when it comes to calculating your hoped-for, realistic monthly or annual income, as well as what your financial goals are.
No matter what kind of home you are thinking of buying these days, you would be wise to work with experienced experts who can guide you through every step of the purchasing process. At Ray White Surfers Paradise, we have completed countless transactions for buyers and sellers alike, and can help you land the investment home of your dreams. Get in touch with us today to learn more about what we can do for you.