Is it better to buy a house or a unit as an investment?

Mark Fitzpatrick | May 06, 2018

I hear this question all the time.

There’s a saying, land appreciates and buildings depreciate and it tends to give many investors the impression they should favour houses over units.

Here are a few pointers to the way I respond to the question.

1. Houses are built on land and land with the required surrounding infrastructure is an increasingly scarce resource. A house will rise in value according to a corresponding rise in demand. More often than not it is easier to renovate and improve a house because with units you have to get permission from the strata

2. If you are buying a house or unit as an investment you need to consider the rental market as most tenants can only afford to rent a property at a particular price point. 

When it comes to deciding between making an investment in a house or a unit, you need to consider how risk adverse you are, what is your investment strategy and what are the average property prices for both houses and units in the suburbs you are looking to buy?

I tend to suggest investors should look properties located 5 to 10 kilometres from major cities with at least two bedrooms and a lock up garage; these properties tend to be the most attractive option for renters.

It is always important to 

* get a valuation on the property

* beware and understand of all ongoing expenses

* do your research

* weigh up potential returns

* potentially consider using a buyer’s agent.

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Happy hunting and good luck