House vs Apartment – Which Is Better for Capital Growth?
Many property investors favour one type of property – either apartments or houses. While there are pros and cons to both, which we will discuss here, one of the often forgotten advantages of houses is the investment you’re making not only in the bricks, but also in the land.
Land value in itself increases over time, and investment in a piece of land also provides opportunity to renovate, subdivide and develop, all of which lead to greater capital growth.
But, with land investment, also comes time, money and skills.
So, what’s the best path to go down?
First, let’s weigh up the clear pros and cons of different property types for different property investors.
HOUSE AND LAND INVESTMENT
Advantages
- Opportunity for higher capital growth – depending on market conditions
- Strategic improvements e.g. renovations, subdivision, development
- Depreciation of the structure of houses
Disadvantages
- Generally lower rental yield
- Higher maintenance costs
APARTMENT
Advantages
- Generally higher rental yield – good for cashflow
- Easier to hold – a strata manager is responsible for the upkeep of the building
- More affordable options available
Disadvantages
- Lack of land value impedes capital growth
- Strata fees
- Limited renovation opportunities
- Some markets are oversupplied
- Banks can have stricter lending policies
HOW DO INVESTORS CHOOSE THE RIGHT INVESTMENT PROPERTY?
While all types of property have good and not-so-good aspects, there are some key decision-making factors that are the same for any property type.
Ask yourself…
Can I afford this property? – Know your numbers. If you can’t afford the deposit, the loan repayments, the taxes you’ll pay, the agent’s fees and any renovations you’ll need to do to ensure good rental income, don’t buy it. Speak to a lender or mortgage broker who can help you work out what you can afford.
Is the location right? – Quality location is one of the golden rules of real estate investment and might be a deciding factor in choosing the style of property you buy. If you know the location is right, but can’t afford to buy a house, an apartment might still allow you to own an investment property in a flourishing area.
Is there enough growth opportunity? – If you’re keen to maximise capital growth from every investment, one of the huge advantages to houses and land investment is the potential to expand. Investing in land means you can create multiple income streams via subdividing, developing or rebuilding. This tactic is only really possible with house and land investment.
BUILDING A DIVERSE PORTFOLIO
Great investors capitalise on a range of opportunities across the real estate spectrum. Before you sign the dotted line, talk to our team of experts to establish the right investment strategy for you.
We have a number of free property investing masterclass webinars to help get you started.
Book your spot now and find out what you need to know about the current market landscape and how you can make it work for the ultimate wealth creation opportunities in 2021 and beyond.
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Turning $80k into $800k
Welcome to the first episode of Property Investor Tales – Stories From The Front Yard!
Each week I get to speak to property investors from around Australia about their investing journeys. As the head of coaching at Positive Real Estate, I’ve been fortunate to connect with thousands of investors who have a story to tell. My hope is that from these incredible investors, your own investing journey is made that little bit easier.
Abe Pasilidis is my guest today and he has an inspiring story to tell. I won’t give too much away but listen out for an $80k investment has turned into $800k, plus a hilarious story of property management gone wrong (when you DIY).
Enjoy this conversation with Abe!
Once you’ve listened to this episode, I’d love it you hit the subscribe button so you get notified every time a new episode drops.
As you can guess I love hearing people’s property investor tales so if you’d like to share yours then please get in touch with me via email at propertyinvestortales@positivementor.com.au You can watch all of these podcasts over on YouTube at Positive Mentor or at positivementor.com.au
Today, I am talking about some key lessons I learned from Dr. Andrew Wilson, a housing economist and a funny bloke. He is a member of the Chartered Surveyors Community, a wealth of knowledge, and a voice of reason when it comes to real estate investment. I’ve adapted his predictions into my strategies and share them with you today!
The Biggest Lie of Investing Revealed
You have been lied to… by you! Today we are talking about the biggest lie you have been telling yourself about real estate investment and your wealth creation journey. Want to know what it is? I could just TELL you, but then you wouldn’t learn. It’s embedded in this podcast – feel free to DM me when you think you’ve found it!
Today, I am talking about some key lessons I learned from Dr. Andrew Wilson, a housing economist and a funny bloke. He is a member of the Chartered Surveyors Community, a wealth of knowledge, and a voice of reason when it comes to real estate investment. I’ve adapted his predictions into my strategies and share them with you today!
Want a $220K Tax Free Passive Income?
Sound too good to be true? Well, it’s not, but you need a plan if you want to achieve it. Let’s Wealth Coffee Chat!
20 Investing Lessons from COVID-19
What do you need to know about corona economics? We have learned a lot of lessons through investing during the pandemic, and I want to highlight some of those today. I have a list of 20 however I don’t think I’ll get through them all! I want you to walk away from this episode understanding what happens when real estate markets transform and what will happen if we don’t take advantage of the lessons that are right in front of us.
How Does an Investor Lose $36k in a Boom Market?
Investing is a mind game once the nuts and bolts are added to the mix, so how does it happen? The answer may surprise you. Let’s Wealth Coffee Chat!
A Property Investors Guide To Guaranteed Rental Increases
Rent is your weekly or monthly incomes from your property. And it’s an income you don’t work for. It’s the absolute key to good cash flow and passive income, so it’s essential you are able to keep raising your rents at regular intervals. But, what makes it possible for property investors to do this?
My Real Estate Pet Hates
This episode is about all of the things in the real estate community that piss me off. From investors consulting clickbait on social media to predatorial real estate agents giving themselves fake awards, we are going to talk about everything that is wrong with the real estate industry that you need to know about as a property investor. Hopefully, after listening to this you will be able to avoid some of the most common pitfalls that property investors fall into during their wealth-building journey.
Why Do You Want to be Financially Free?
Will you survive the emotional roller coaster that is property investing? It takes time, money and commitment to create a portfolio, but sadly most who start out don’t make it, why? Well, let’s Wealth Coffee Chat!
The Only Time You Should Sell An Investment Property
The golden rule of property investing is to buy well and NEVER SELL. However, there are always exceptions to the rule… Firstly, let’s look at why you would keep an investment property? If you buy a great piece of real estate, in the right location, it will always create a passive income for you, so there will be no reason to sell it.
The Emotional Roller Coaster of Property Investing
Will you survive the emotional roller coaster that is property investing? It takes time, money and commitment to create a portfolio, but sadly most who start out don’t make it, why? Well, let’s Wealth Coffee Chat!