Is Buying an Apartment for Your Investment Property – Do We Recommend or Not? | Real Estate Made Easy.

December 14th, 2023

Conventional wisdom states that real estate is one of the most solid investments you can make. But Empire 8 Property argues that not all properties are created equal – especially when it comes to apartments.

While apartments can generate decent rental income, they rarely appreciate substantially in value over time. You’re better off avoiding apartments, particularly units in high-rise complexes, if portfolio growth is your priority.

The Problem with Apartments

Unlike houses, apartments lack a key component primed to increase in value – land. The physical structure tends to depreciate, while well-positioned land becomes more scarce and valuable. This makes houses on decent-sized blocks a much more promising investment vehicle.

What’s more, apartments provide little opportunity to build equity and leverage it to purchase additional cash-flowing assets. Minimal land value appreciation means less ability to draw equity out for the next purchase. This slows the velocity of your portfolio growth.

The only apartments worth considering are ones with unique characteristics that boost exclusivity – such as units in boutique, heritage buildings or luxurious penthouses in prestigious locations. But these exceptions prove the rule.

House and Land Packages – The Superior Option

Instead of apartments, Empire 8 Property stresses that free-standing houses on blocks of land are markedly superior for investment purposes across several measures:

  • Stronger capital growth potential
  • Higher rental yields
  • Opportunity to extract equity for future buys
  • More attractive financing terms

You don’t need a huge acreage either. Even houses on reasonably-sized lots drive better outcomes than high-density apartments in most cases.

The only exception is when you already have 5-6 established investment properties. At this point, an apartment purchase can provide balance through added cash flow. But land and houses should make up the core of your portfolio.

Let Empire 8 Property help you build lasting wealth through strategic property investment minus the apartments. Get in touch today to map out a high-performance portfolio tailored to your goals.

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