What are the benefits of investing in a house compared to an apartment?

September 16, 2019

Investing in a well-located, well-priced house or apartment can deliver numerous advantages to investors.

In many cases, a well-located house provides an investor with the opportunity for decent capital growth. This is because the land the house is built upon will continue to appreciate over time. 

With a house, you aren’t bound to a body corporate made up of other owners or need to pay strata management fees. If you take note of local planning bylaws, you can make whatever alterations to the exterior of the property you wish without anyone’s consent. 

If you own a house, it might be possible to be more accommodating of the needs of your tenants. For example, there can be restrictive strata bylaws prohibiting either owner-occupiers or tenants from keeping pets in an apartment. However, to be fair, this situation is changing with new strata laws in some parts of Australia. 

Landlords who own houses can also charge tenants directly for water usage. Water is individually metered for standalone properties. Also, you won’t pay strata or special levies for maintenance or repairs if you own an investment house. That said, housing investors will pay full freight for repairs.

On the marketing front, a house might appeal more to tenants with growing families, who have pets, or tertiary students seeking shared accommodation close to a university or TAFE. 

With an apartment, often the upfront cost of ownership will be lower than a house. The median house price in Hobart, for example, is almost $499,000 while the median for apartments is $376,000. The relative affordability of apartments can enable investors to buy into more sought-after locations where they are priced out of the housing market. Better still, buying well-located apartments can enhance the prospects of long-term capital growth. 

Also, the costs of maintenance can be potentially lower with an apartment. Moreover, repairs to communal facilities such as libraries, pools, lifts, and gardens are shared with the other owners in the body corporate. Also, pools, libraries, tennis courts, and other communal facilities may entice tenants to your apartment. 

Owning an apartment might enable you to entice singles and younger couples saving to your investment property. Besides, there is some recent industry research indicating downsizers are increasingly choosing to rent rather than buy, which may benefit apartment landlords. 

For more information about the benefits of owning a house or apartment as an investment, contact your local Raine & Horne office for more details.