The big debate: house versus units
Many potential investors and experienced property gurus ponder this all the time when they encounter a bargain. It is a legitimate question that you should always ask yourself. There is no black or white answer to this question, but rather if the situation allows you to or if it is a true bargain. In my experiences with units, they don’t increase in capital value as much as homes. Why? More people prefer to rent or live in a home with space and privacy. There is a larger demand for houses than units. Units can be intimidating to some people if they wanted their own privacy or people with children. People with children normally like a large backyard for their children to play in. Units do not offer this space.
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You also need to think about the suburb. In most suburbs near the CBD, houses are simply not affordable. Therefore the units are a more affordable and realistic option.
The other things you should think about are:
- Are you buying for capital gain or rental income?
- do you want to pay the strata management fees that come with units
- Is the money difference between the house and unit worth large enough for you to consider buying a unit? if not, then buying a house might be a smarter option in the long term
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The benefits of houses are:
- larger pieces of land
- private back and font yard
- private fencing
- larger home
- normally has more rooms and are more spacious
- no strata fees
- more space means you can do more with the home, more furnishings
- has more space for more car parks
- more space to expand your home (STNC)
Cons of houses:
- More expensive to buy than units
- council rates will be higher because of the higher value
Benefits of units:
- less financial outlay in the same suburb as a house
- can be more easier to rent to single people or childless couples
- More appealing to people who don’t want to maintain a garden
- More financially appealing to renters because its normally cheaper to rent than a house
- cheaper council rates than house in the same area
Cons of buying units
- normally smaller home, rooms, dining
- less room in the backyard
- strata fees