Units vs. Houses

YNM Real Estate
19 December 2021

Whether you are considering units or houses, you should always focus on the factors that will determine if you will make money as a property investor in the long run. Your opinion should not matter when you are dealing in an investment property.

Study the market when you are investing, understand the strength of the location where you are considering investing, assess the supply and demand whether it is a house or a unit you are interested in and finally you should adhere to your affordability. Don’t invest in houses if you cannot afford. Do not invest in units if they are pricier and you find the investment a bit overwhelming. Your journey as an investor will be loaded with risks and uncertainties. Do not expose yourself more than you should and you are comfortable with.

Units vs. houses, a deeper look

  • Units are usually cheaper than houses – in certain areas however, this is the opposite. Many investors start with units, begin to make money, gain some experience, hone their expertise and then invest in houses. The prices will vary as you move to and from the cities, suburbs and away from the state capitals but you can understand the fundamental difference in pricing.
  • The cost of houses is further increased because of ongoing expenditure. There are council rates which are much higher for houses than apartments or units. With apartments or units, there is usually the strata fee that you should pay.
  • Houses are high maintenance. Even if you have a small house with three or two bedrooms, you will be the sole person in charge of maintenance. You can hire a property manager but you must pay for the maintenance from the rent you collect or whatever revenue you generate. Units have common areas, there are many owners and tenants in the building, there is a body corporate that will share the responsibility and the costs of maintenance.

Your eventual goal should define your choice. Whether short term capital growth or returns and less expenditure in the short term with promising returns eventually when you sell off – the choice is yours and is dependent on your property portfolio.

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