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Unit values more resilient than houses
House or unit – what makes the better investment?

When investors begin to think about property choice they are often driven by factors which may lead them to making mistakes. One of these factors is price – an investor will think of a price with which they are comfortable and go looking for a property which matches that price, paying little attention to whether it’s actually in a suitable area.

Choosing according to price will very often lead an investor toward buying a unit, as they have the misplaced notion that a unit is a ‘cheaper’ stepping stone to the more expensive free standing home.  Some see it as a way of dipping their toe in the water and making a smaller commitment. However, buying a unit for this reason could end up on the list of most common investor mistakes.  In fact the type of property an investor should buy must be that which best matches the demands of the types of people who live in the area.

An investor should first of all carry out the research required to identify viable areas to invest – areas which display known growth drivers and appear to be on the way toward becoming a future hotspot. Once done, the next step is to establish the demographics of that area – who lives there?  Is it predominantly families, singles, couples or retirees?

Knowing who your most likely tenant will be then helps you to decide which property type is best – houses for family areas, high rise apartments for couples, single level villas or smaller homes for retirees etc. Getting this wrong may result in two unwanted outcomes – a difficulty in getting a tenant, and a future difficulty selling the property, as it will be of a type which as little demand.  Always make sure that you are familiar with the most in-demand property type, and don’t take the ‘cheaper’ option unless it is appropriate.

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