What makes a good property investment?

Houses

Advantages:

• Capital growth: Houses generally offer better capital growth prospects. Over time, the value of houses tend to appreciate more significantly compared to other property types.
• Control: Owning a house gives you greater control over the asset. You can make renovations and improvements without needing approval from a body corporate.
• Land ownership: When you buy a house, you also own the land it sits on. This can provide additional value and potential for future development or expansion.

Considerations

• Vacancy risk: Houses may experience longer vacancy periods compared to apartments, which can impact your rental income and overall return on investment
• Maintenance costs: Houses typically require more maintenance, which can lead to higher ongoing costs.

Apartments

Advantages:

• Urban living: Apartments are often located in urban areas, providing residents with easy access to city amenities, entertainment, and employment opportunities. This can make them highly desirable for tenants seeking a convenient and vibrant lifestyle.
• Lifestyle inclusions: Apartments can offer additional amenities such as an onsite gym and even pool facilities, easy access to public transport, and security staff, which can potentially enhance the quality of life for building occupants
• Affordability:  Apartments generally may be more affordable compared to a standalone property

Considerations

• Capital growth: Apartments may have lower capital growth prospects compared to houses. The value appreciation might not be as significant over time.
• Strata fees: Owning an apartment means you'll need to pay strata fees, which can add to your ongoing expenses
• Shared ownership of public space means that you’ll have to plan when using common property areas and often to gain strata permission for certain renovations you may want to carry out

Villas/townhouses

Advantages:

• Balance: Villas and townhouses offer a balance between capital growth and rental yields. They can provide a good mix of both, making them a versatile investment option.
• Renovation potential: These properties often allow for some level of renovation, giving you the opportunity to add value
• Affordability: Villas can be a more affordable property type compared to a standalone property

Considerations

• Strata restrictions: Like apartments, villas and townhouses may have strata restrictions that limit what you can do with the property
• Control: You may have less control over renovations and improvements compared to owning a house

Other considerations

When choosing an investment property, it's important to consider factors such as location, rental demand, and your own financial capacity and risk profile. Thorough research and strategic planning are key to making a successful property investment.

At CommBank, we're here to support you on your property investment journey. Whether you're a first-time investor or looking to expand your portfolio, our team of experts can provide the guidance you need to make informed decisions.

Investing in property is a significant commitment, and understanding the pros and cons of different property types can help you choose the right investment property for your needs. Remember, the best investment property is one that aligns with your financial goals and circumstances.

For more information and personalised support, visit our website or speak to one of our Home Lending Specialists today.

We're here to help 

Read our complete guide to investing in property, made easy. Our expert lenders can help guide you through the entire process from start to finish.