THREE Best Investment Properties
Updated: Jul 2
Looking at buying property as a means of wealth creation, but you're unsure on what is going to be the best type of rental property?
Well, we're here to help! As experts in real estate investing, we're going to share the most common types of residential investment properties that we're assisting our investor clients with.
In this article we explore several types of investment properties and their suitability with different investment strategies that we discussed in our most previous blog. If you haven't read it yet, we highly recommend that you check it out. Especially if you're a starting investor. The link is here.
At Real Estate Investment Finance we only deal with properties that are full turn key, fixed price packages. This ensures that our client's are NOT sprung with hidden costs along the journey of purchasing their investment properties. Therefore, the types of investment properties that we primarily assist our clients with are; house and land packages, townhouses, and apartments.
Each of these three types of properties will be analysed to help you determine what may be more suitable for your strategy as an investor. While no property type is better than another, it's all dependant on your individual circumstances and the reason why your buying property as an investor.
If you're using real estate investing as a means of wealth creation it's important to remember that you should buy with your head and not your heart. Buying property as an investor is a completely different approach to buying a property that you're going to live in. So, it's important to be practical and think about how it will benefit prospective tenants.
House & Land Packages
At REIF we find that NEW house and land packages make for the best investment properties. We only work with builders that offer full turn key, fixed price packages. Full turn key packages have all the essentials (stoves, dishwashers, lawns, fencing, etc.) included in the build cost. Then when you sign for the property, the price becomes fixed. This ensures you aren't hit with other costs throughout or at the end of the build process.
We have a variety of reasons as to why we only deal with new properties to support our investors, opposed to established. Primarily being that they're better in the long-run, due to low maintenance, improved tax implications and the pure fact being that they work better with adding more money back into your pocket!
Pro's of House & Land
As established there are great benefits to investing in new house and land packages. Though, we've listed our favourites below.
Low maintenance and therefore lower costs in property upkeep
The ability to design your rental property to suit it's investment needs
Land is ever-increasing in value. So, if the house depreciates over-time, the land will generally appreciate in value
Tax refunds. As the property depreciates you can claim this as a cost at tax time
Con's of House & Land
There aren't many negatives to purchasing a new house and land package to service you as a rental property. The few are listed below.
Sometimes costs a little more compared to established house and land packages
Servicing your loan throughout the construction process of building the property
These types of homes make for a great rental property. Once again, we only offer townhouses that are full turn key and fixed in price. There are a range of benefits of investing in this type of property and just like the others, they come with some negatives that aren't suitable for all types of property investors.
Pro's of Townhouses
They offer a greater sense of community for prospective tenants and residents
Often more affordable and can produce higher yields if your real estate investment strategy is to generate more money to pocket each week after costs
Most usually have common area amenities for residents to use
Generally bigger in size compared to an apartment
Con's of Townhouses
Lower potential for capital growth due to lack of land
Reduced space which sometimes means less privacy
Strata fee's/body corporate fees
Apartments are a great market for investors to chip into. They're one of the best investment properties due to their practicality for tenants, especially in built-up city regions. If you're thinking about buying an apartment as your rental property it's a great idea to weigh up their pro's and con's.
Pro's of Apartments
Location and convenience
Appealing for those seeking an urban lifestyle, particularly within the inner-city
Can produce higher yields as they generate more profit after costs
Common areas for building complex to use
Con's of Apartments
Reduced potential for capital growth due to lack of land
Reduced space which can mean less privacy
Strata fee's/body corporate fees
Ready To Align Your Strategy With Your Property?
Want to take that next step as a property investor? If you think that you know what your strategy is for wealth creation, reach out for a free consultation with a REIF Investment Strategist. We will be able to help you map out your goals and assist you with finding the best investment properties to align with your circumstances.
For a free - no-obligation consultation, reach out to us on the details below. We will be able to book you an appointment with a friendly specialist at your best convenience.
Ph: 1300 130 932
We explore this topic in our eBook 'Building Wealth Through Property.' Check it out here for FREE!