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Townhouse and Apartment

Multi-Family Unit Properties

What Are Townhouse and Apartment Investments?

Townhouse and apartment investments can offer a unique opportunity to build a diverse real estate portfolio. Unlike single-family homes, townhouses and apartments provide multiple rental units, increasing your potential income. With lower maintenance costs per unit and the potential for higher rental yields, these investments can be a lucrative addition to your financial strategy.

Townhouses are single or multi-storey residential dwellings that share walls with neighbouring units on one or both sides. They typically have their own entrance and private yard or patio.

Apartments are individual units within a larger building, often referred to as an apartment complex or building. They may be located on multiple floors and share common areas such as hallways, lifts and lifestyle facilities.

Both townhouses and apartments are considered multi-family properties, meaning they have multiple dwelling units within a single structure. This distinguishes them from single-family homes, which are detached structures with only one dwelling.

Townhouse vs Apartment: Which is Better?

The decision between investing in a townhouse or an apartment can be influenced by various factors, including your financial goals, lifestyle preferences and the specific market conditions.

Townhouses often offer a greater sense of privacy and ownership, as they typically have their own private yards or patios. This can be appealing to investors seeking a more standalone living space to offer renters. Additionally, townhouses can potentially appreciate in value at a higher rate than apartments, especially in areas with limited land availability. However, townhouses may have higher upfront costs and ongoing maintenance expenses compared to apartments.

Apartments are generally more affordable and offer lower maintenance costs as shared common areas and amenities reduce the individual burden. This can make them a more attractive option for investors with limited budgets or those seeking a more passive investment. Apartments may also have higher rental yields due to their lower purchase prices and greater demand in many urban areas. However, apartments may have limited privacy and noise levels can be higher due to shared walls and common areas.

Ultimately, the best choice for you will depend on your specific investment objectives and the characteristics of the local real estate market in which you are purchasing. Consider factors such as your target rental demographic, expected rental income and potential for property appreciation when making your decision.

Our team can help you decide which option is best for you, or even a mix of both if that suits your investment goals. Talk to us about your goals today.

Benefits Of Townhouse and Apartment Investment Properties

Stable Income Stream

Townhouse or apartment rental property investments provide a regular and dependable income stream, producing a positive cash flow that is higher than typical stock dividend yields. Property investment also has an overall much greater return on investment (ROI) over time. Always take into account the lifetime of your investment; in this department, townhouses and apartments are often considered to be the safer investments.

Debt vs Income

The amount of the property’s net operating income (NOI) can often be used to reduce the debt on the property. The NOI is calculated by the gross income, less all expenses before debt. Since the NOI can be higher on low maintenance apartments and townhouses, it can be used to cover loan repayments and this can reduce the debt balance and create equity for your investment portfolio.

High Appreciation Value

Multi-family rental properties, such as townhouses and apartments, can provide excellent appreciation in value that often meets or even exceeds other investment types. Maintaining your investment property in the long-term will create the best environment for value increases to be realised. The grounds must be well kept and minor repairs performed as part of an ongoing maintenance plan. This is easier to do when you have quality maintenance staff in place, who share your desire to provide clean, safe housing. Townhouses and apartment complexes often have a body corporate arrangement in place that will take care of common area maintenance on your behalf.

Reduced Maintenance Costs

Ideally, you want tenants who will take an interest in caring for the property. This can lower the number of repairs that are required with every lease renewal. Since the majority of people who rent out apartments and townhouses are singles, couples or small families, the average costs of property management can be lower on an annual basis.

Should I Invest In A Townhouse Or Apartment?

With a wide range of investment property types available in Australia, many people looking to invest wonder which type is right for them. This can be a question both for first-time investors looking to start and for seasoned investors looking to grow or diversify their current portfolio. Read on for an overview of why townhouses or apartments can make a good investment decision.

Demand

Townhouses and apartments will generally cater to a wide range of different demographics. They’re appealing to young professionals, small families and retirees looking to downsize. Because of this broad range of potential renters, the demand for townhouses and apartments is always relatively stable, particularly in metro areas with a higher population and a consistent need for housing.

Additionally, as population demographics and lifestyle preferences continue to evolve, we’re seeing a growing movement in support of simplified urban living. This should continue to foster demand for townhouses and apartments in the future.

Cheaper Property Prices

A detached or single-family home will offer a wide range of benefits for investors, but they also require a much bigger up-front investment. In contrast, townhouses and apartments can be a more affordable option for entry-level buyers. A lower purchase price means investing in an apartment or townhouse can be achieved with a lower deposit and lower borrowing capacity, making them the ideal choice for first-time investors.

Ability to Diversify Your Portfolio

The lower price point of apartments and townhouses also makes them ideal for conservative investors who want to diversify. To safeguard against market fluctuations, some investors prefer to purchase a range of different properties in multiple areas (ensuring all their investment eggs aren’t kept in one basket).

Value, Liquidity and Buyers

While townhouses and apartments may have lower initial purchase prices, they can still appreciate in value over time. This is especially the case if they’re in sought-after locations close to urban areas.

The diverse pool of potential buyers for townhouses and apartments also helps to ensure that investors have multiple exit strategies available, if necessary. From first home buyers to other investors or downsizing retirees, the steady demand for apartments and townhouses ensures investors won’t be stuck with an asset that is difficult to liquidate.

The Positive Income Properties Difference: Your Townhouse And Apartment Partner

At Positive Income Properties, we specialise in helping investors unlock the potential of property investment when choosing a townhouse or apartment. We understand that navigating the property market can be complex, so we’re here to guide you every step of the way.

Our Services

Financing Expertise: We can connect you with experienced mortgage brokers to secure the right financing options for your townhouse or apartment purchase.

Streamlined Acquisition Process: We handle the entire process from initial search to settlement, ensuring a smooth and efficient experience.

Financing Expertise: We can connect you with experienced mortgage brokers to secure the right financing options for your townhouse or apartment purchase.

Leasing and Management Solutions: Need help finding tenants or managing your property? We offer comprehensive leasing and property management services to maximise your rental income and minimise your workload.

Benefits of Working with Positive Income Properties

Experienced Team: Our team of property experts has extensive knowledge of the townhouse and apartment market, ensuring you make informed investment decisions.

Personalised Approach: We take the time to understand your unique needs and goals and tailor our services to fit your investment strategy.

Stress-Free Experience: We handle the complexities of the process so you can focus on the bigger picture – building your wealth and achieving financial freedom.

Ready To Invest?

Investing in townhouses or apartments can be beneficial for conservative property investors due to their high demand, lower initial costs, diverse pool of buyers and potential to appreciate in value. These factors make them an appealing and relatively safe real estate investment option. This information is simply a guide to help you with your research. The type of property you ultimately invest in will still depend on the type of property investor you are.

Here at Positive Income Properties, we source the right property deal based on what will work for our client. We are involved every step of the way, from sourcing to financing and from settlement to leasing the property. Whether you are a seasoned property investor, a beginner or simply want to buy your first home, we will assist you. We can secure tenancy from the onset of settlement, ensuring a streamlined process.

To find out more about how we can assist you, please refer to our 1-3 Year Rental Guarantee. If you are still undecided or are locked in on a particular property or budget – subscribe to our FREE Resources and Property Deals when you click the button below.

You can get in touch with us and book in a time convenient to you to chat about your investment options and how we can help you.

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