Difference of Buying a Townhouse and Apartment | Basic of Property Investment | Property Investment

September 15th, 2020

Hi, my friends in this blog, what I want to discuss is buying an apartment or buying something with the land or a townhouse. What’s the difference? What you should be thinking when you’re trying to purchase a property. And how like all these things, how they will impact your future goals and your future wealth as well.

So generally speaking in apartments to me. If you’re talking about here in Australia, generally they are not going to be very good investments or a good home, unless you want to live in a certain particular area.

And you want to buy something in that particular area. And it’s only the apartment you can afford, but still an apartment for me is like buying an apartment is like buying a car. It depreciates in value. You buy a car for $60,000. After a few years, it might be only 40,000 or 30,000, whatever apartments.

The biggest difference in an apartment compared to a house or a townhouse is there is no land component in an apartment. So land is something that is case apartments. You can make hundreds and hundreds of apartments in any given suburb, as long as the council gives the approvals, we can build as many apartments as you like.

You get a small piece of land, build a high rise and build many apartments on that. The one goes down in value, but they don’t go up in value as well. Sort of they sort of say consistent if you’re invested, you might be able to get a higher rent, but then they’re not going to go up in value.

So even after 3, 4 years, they might be similar to what they buy, what you bought them for an exception to that. One is in case of apartments, If you buy something which is very premium, that might go up in value. Something that isn’t a very, very good area, central to the, as close as to, to the CBD as possible or in a very, very posh, good area where there’s no land at all leftover.

And the apartment that you’re buying is very, very distinct, very unique quality, very Bosch and very lifestyle kind of a thing and could be in a heritage building or something that can be replicated. Someone can come next door and build another a hundred apartments. Like your one.

So all want, if it’s something unique, something valuable, then there’s chances of having a good growth over several years. But generally speaking, most of the town halls, like 90% of the owners are like just boxes put on one topic. So the Peer value of the unit that’s on them is not as good as compared to something with the house and land or something like a house, which got some land attached to it.

Even townhouses, even though the land is maybe maybe a bit smaller, but then what will happen is at least. They have some land associated with it and then you can increase value. Land is something that they’re not making any more. That’s what they say. I want to try and switch up the light to see if it helps.

It does help. So I’m going to keep it on. So I was saying even townhouses have some land associated with it. So you want to buy something which has some sort of land, even if it’s a small sort of land that will go up in value. As a new investor or as a home buyer, you need a house because you want to live somewhere as an investor.

You need a house. You just can’t keep buying land, unless you’ve got a lot of money. If, unless you’re doing land banking, you’ve got a lot of money up your sleeve, but you want to buy an investment property and have a house on top of that because you want to be able to get someone else to pay the rent so that your mortgage is coming down on that house.

So generally speaking land will go up in value over several years. Of course, the construction. It doesn’t go up in value, but you really need it to, so that you’re able to sustain your mortgage on that particular property. if you want to compare the both generally 95% or 90% of times, you would want to go for a house, if that doesn’t work out, then of course a townhouse is a better choice than just going for an apartment.

Even if you might have to spend a little bit more in the long run, it will work out better of course it’s lifestyle things and other things that you might like. No matter how much money you make, you just don’t want to sacrifice. Of course, those things are there. I guide my investors to stay away from all those kinds of emotional decisions.

But people are people. They have to do what they have to do. But my advice would be to buy something with the land, even if it’s a small component of a land, but has some land attached to it. And that way you will be, um, you will have a much better position in value of your property. And also location is always important.

Of course, location of land is important. I’m not saying you go eat in a country area and you buy a big block of land and no people are living there. That’s not what I meant. I mean, something in a good location, but has some land attached to it. And then the house on top, and that’s a magic formula.

So need the land for capital appreciation and the rental for paying off your mortgage by someone else. So that is my tip for today and hope you like this video as well. If any questions always give me a call. (0433 213 993) I’m here to help you out. I want to help you give me a chance and we’ll talk and sit down on coffee and then want to do something good for you.

So until next time, be happy, think wisely and help each other. 

Thank you.