Units or houses? Why not both? There are theories that say investing in units is better while others say houses are better. What is best for an individual comes down to personal motivation for purchasing.
A house will typically offer many more options to increase capital value and rent yield, like adding a deck or bedroom, or enclosing the carport into a garage. Houses come on sections with the added advantage of subdivides, extensions and rezoning. These areas of investment may not be an option when it comes to the typical unit investment. Sure they come with “higher risk” – or is it that you simply need to do a little more research before you purchase?
Investing in a property where capital outlay is needed requires more time and energy than a unit investment requiring little work. The other consideration of course is demand. Typically a rental unit returns a lower yield then that of a house and the demand from tenants for a unit is greater than for a house.
The capital value of an investment unit can be held back when a similar unit in the same block is sold cheaply by a highly motivated vendor. There tends to be more turnover in a block than in a dwelling and if higher returns are achieved in the group, then the flow on effect to others is very positive.
In establishing if a unit or a house is a better investment, the answer is not straightforward given the diverse range of considerations. An experienced property manager can always help you in deciding which way to go, given their broad range of experience and expertise in establishing returns and potential capital increase in an investment.
To discuss your investment property or if you are considering purchasing an investment property, contact Laura Levisohn from M Residential.