House or Unit ?

Hi guys

Which is better given the below considerations.

Units one main concern is strata and levies and sink funds

Houses - something I observed is that in areas that have houses on like 600 or so m2 properties as typical tend to have 90 •/• owned houses and only 10 •/• as rent houses .. so if one invests to get rent and not many are renting because they own they can we invest in such?

 

Chicken or fish? Each to his own.

 

What is your strategy in this one from an investment standpoint

 

I've dabbled in each with return being the important outcome.

Spoiler: Secret strategy

 

Are my concerns/ considerations valid ?

 

I think your concern about units is valid but doesn't mean that they aren't a good buy. You just need to always calculate what the net and gross yield is so that you see the true answer/

The concern about having a rental in a high owner occupier area is not valid to me. That is the perfect situation in my mind as there is little rental supply for what is probably a very nice area. You don't want a house in an area which has a lot of supply for rentals as there is too much competition.

 

Thank you !

That sounds right to me, but would the people in that range be looking for a rental ? Could the rental supply being less actually be low rental demand ?

 

A rental in an area of majority owner occupiers should mean better street appeal and lower turnover, but depends on the area.

Also the same budget won't buy you a house in the same location as a unit, so its not comparing apples with apples.

Another question thats pretty vague

 

Generally the demand is always there. Just be careful to not equate demand with making it a good buy. It all still comes down to yield and capital growth prospects.

 

Houses generally outperform units in growth.
Units generally outperform houses in yield.
When purchasing in the same suburb, houses generally cost more to buy than units.

The options one picks for purchase is usually based on their brief rather than what is better outright.
In all situations, it's important to factor in the supply and demand of that asset type and the future supply and demand of that asset type.

 

I've done very well with both dwelling types. Would I buy a unit again? Most likely no. Nothing wrong with units but generally houses are a more versatile asset from an add value perspective.


When deciding on what type of dwelling to buy, the most important factor imo is to buy what the demographic of the area wants and is in the greatest demand for that specific area .