Arnold
CibbuanoHousing or Apartments – Which is the better investment?
September 11th 2006 00:28
I’m going to kick off the first half of the week with a comparison of the housing and apartment markets in Australia and try to come to some sort of conclusion as to which is the better investment option. The choice between and apartment and housing investment is most valid for those looking to invest in city metropolitan areas. Usually these investors have to weigh up if they’d prefer to invest in an inner city apartment or venture into the suburban city fringes.
A big factor in the decision of what to buy comes down to price, value for money and affordability. An inner city apartment will most likely cost the equivalent of a modest suburban home. If you are relying on the investment for residential purposes, you’ll have to consider the number of people that will be dwelling in your investment and the suitability of the location.
Overall, property experts will recommend purchasing a suburban home rather than an inner city apartment. This recommendation is largely based on their forecasts and the typical past performances in the capital growth for the two investment options.
These are a few pointers to consider that will help you decide whether to invest in housing or apartments.
Capital Growth:
Capital growth is a measure of the rate of return on your initial investment. In the inner suburban housing market it usually takes anywhere between 7 to 10 years for a property to double in value. Experts agree that the rate of growth for an inner city apartment would be far slower. In a ten year time period an apartment may only appreciate by 20 per cent.
The exception to the rule within the inner city apartment market is those that have unique features and are rare finds. The very expensive inner city apartments such as those that occupy and entire floor or have older building features will show similar rates of growth as suburban housing markets.
Parking:
When you are living in the inner city, parking is always a premium. Generally you’ll need to rely on getting an allocated parking spot with your apartment otherwise owning a car will cause a continual parking nightmare. You should always look for a property with a parking space if not multiple. It is estimated that a parking space can add as much as $25,000 to the value of an inner city apartment and $30,000 to an inner suburbs house.
I’ll cover some more considerations tomorrow, stay tuned for further information.
A big factor in the decision of what to buy comes down to price, value for money and affordability. An inner city apartment will most likely cost the equivalent of a modest suburban home. If you are relying on the investment for residential purposes, you’ll have to consider the number of people that will be dwelling in your investment and the suitability of the location.
Overall, property experts will recommend purchasing a suburban home rather than an inner city apartment. This recommendation is largely based on their forecasts and the typical past performances in the capital growth for the two investment options.
These are a few pointers to consider that will help you decide whether to invest in housing or apartments.
Capital Growth:
Capital growth is a measure of the rate of return on your initial investment. In the inner suburban housing market it usually takes anywhere between 7 to 10 years for a property to double in value. Experts agree that the rate of growth for an inner city apartment would be far slower. In a ten year time period an apartment may only appreciate by 20 per cent.
The exception to the rule within the inner city apartment market is those that have unique features and are rare finds. The very expensive inner city apartments such as those that occupy and entire floor or have older building features will show similar rates of growth as suburban housing markets.
Parking:
When you are living in the inner city, parking is always a premium. Generally you’ll need to rely on getting an allocated parking spot with your apartment otherwise owning a car will cause a continual parking nightmare. You should always look for a property with a parking space if not multiple. It is estimated that a parking space can add as much as $25,000 to the value of an inner city apartment and $30,000 to an inner suburbs house.
I’ll cover some more considerations tomorrow, stay tuned for further information.
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