RSS Feeds: Should you buy a house, unit or townhouse in the Sutherland shire to rent as an investment?
There is much debate over whether houses, units or townhouses are the best investment for people wanting to invest in property in the Sutherland shire. The shire is a large place, and there are many different types of properties available. The following guidelines may assist you in making your decision as to what type of property to invest in. Please however consult your investment advisor and do your own research before making a decision.
Generally speaking the percentage rental return that you will achieve from a unit will be higher than from a townhouse which will in turn be higher than from a freehold house. This means that if all three properties cost the same amount to purchase, then you would get more for a unit, followed by a townhouse then a freehold house. The location will affect rent prices as well. A unit in Cronulla rents for a lot more than a house in Miranda. Whilst Sutherland Shire rental prices can fluctuate greatly from suburb to suburb, or even street to street.
Due to that fact that freehold houses are generally more expensive than units and townhouses however, the rent for those is often higher. As an investment though, units allow a property buyer to recover the largest proportion of their mortgage as rent.
In contrast generally speaking the reverse will be true from a capital growth perspective. You will generally receive better returns in capital growth from houses than from townhouse and units. So its true that whilst if you buy a unit, you are paying more off your mortgage than if you bought a house, that doesn't take into count that the house will most likely increase by more over the course of your ownership. It can be difficult to factor things like this into calculations, especially considering the recent volatility of the housing market. It also depends greatly on where you are buying, for example a Cronulla unit with beach views may increase by more than a large family home in Sutherland or Caringbah.
Please note this is a general rule and depends heavily on what you buy and where it is.
Units and townhouses typically have various body corporate fees and charges that you need to pay as the owner to help cover the cost of general building maintenance. With houses there are generally more maintenance issues that need taking care of. Either way, you should speak to a qualified financial advisor when purchasing property for investment purposes.
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