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Why a home investment makes a
better investment property in Australia


Not much is said about a home investment in Australia but there sure is a lot of marketing hype about apartments, flats, units or townhouses.

The truth is, for investment property, Australian conditions are most suited to homes, not apartments, units or townhouses.

This information will show you the reasons why a home investment is a better property investment but first, it is important to understand some of the characteristics of apartments, units and townhouses.

What is an apartment, unit or townhouse?

Apartments or flats, are medium to high density living. Multiples of small accommodation contained within one building.

apartments for sale         apartments for sale

Units are a cluster of small, single level homes, all on one block of land, which is sub-divided. Often, the buildings are linked together with adjoining walls albeit sometimes only a garage wall. Sometimes they are detached but are still within the one sub-division of land.

investment property for sale         investment property for sale

Townhouses are usually larger and some times detached from other buildings but they are all two storey, which should be avoided for investment.

Two storey structures deter many tenants and also reduce your resale market. The reason for this is that many people do not want two storey as a life style issue. Two storey also adds unnecessary costs to the construction and does not provide additional capital growth to warrant the expense.

townhouses for sale         townhouses for sale



The Common Theme Is A Body Corporate Structure

Apartments, units and most townhouses, require a body corporate due to the common areas of buildings, land or driveway, that are shared amongst all occupants.

Body corporate structures should be avoided as they impose extra costs; significantly increase risk through lack of control with decisions about the property; and limit what you can do to improve your own property in the future.

What Is A Home Investment?

A home investment is any single storey residential property with accommodation that stands alone on a block of land and without a body corporate.

home investment for sale  home investment for sale

Facts About Homes

1.

Homes grow by more (capital growth) or similar to apartments, units and town houses, not less.

2. Homes represent over 80% of the residential market, making houses the most popular form of accommodation
3. Homes are easier to re-sell due to the fact that more people want houses than apartments. This allows a re-sale to both owner-occupiers and investors. Whereas, apartments are largely purchase by investors.
4. The Australian Bureau of Statistics proves that over 80% of Australian's want more space in their house not less. Tenants are no different

(The following section on the benefit of outer suburbs is a quoted extract
from Terry Ryder, respected Australian property research specialist)

Outer Suburbs Outperform Inner Suburbs


“The common belief that expensive inner-city suburbs always out-perform cheaper outer-lying suburbs is the greatest myth in real estate.”

There's no statistical basis to the claim that the "better suburbs" close to the city are the safest investments and are better at resisting downturns.

In fact, the figures prove it wrong. I call it The Myth of Prime Out-performance. It's a mantra for property professionals, who have repeated it so often it's come to be accepted as truth by many investors.

The myth of prime out-performance has become widespread throughout the real estate industry and subsequently deeply entrenched in investors' minds.

The key thing about the claim of superior performance by prime suburbs is those who make it never support it with figures. They have an attitude but they don't have an argument. The reason they don't back it up with data is that the facts contradict them.

The reality is actually good news for those investors that can see past the hype. Most buyers can't afford the expensive inner-city or waterfront suburbs - but who cares! The less-favoured suburbs are cheaper, have higher income yields and provide higher capital growth. It is a win-win-win situation.

This situation has been repeated in major cities around Australia.

The facts are that in any capital city, the expensive inner suburbs are generally poor long-term performers in terms of capital growth. Above all, their price patterns are volatile roller-coaster rides that can produce sharp declines, contrary to popular claims they always hold their value.”


Click here to read independent research about home investment and units


Click here for more information about home investment




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