Thinking about where you’re going to live can be exciting, but also daunting. There are so many things to consider. Thinking about where you’re going to invest is just as challenging. For both, there’ll be that burning question: a house or an apartment?
There’s no easy answer. Whether you’re buying a house for the first time, intending to live in it, or perhaps reinvesting, consider the following 3 things to help you make the right decision.
- Your lifestyle
The lifestyle of a house versus an apartment is very different.
If you choose to buy and live in an apartment, you’ll be bound to follow the rules put in place by the owners’ corporation. They’re in charge of enforcing by-laws that may prohibit pets, using particular areas of the property, growing plants in certain locations, and so on. If you want to modify the property (such as change the tiles), you may also need their permission.
But apartments also have a lot to offer. They’re smaller (requiring less maintenance) and the modern ones can come with pools, BBQ areas, gyms, and sometimes even cafés. Nowadays, more apartment blocks are also allowing their residents to have pets. If you live in the city, your apartment will be close to plenty of shops, nightlife, restaurants, public transport, and everything you could want for a cosmopolitan lifestyle.
If you choose to buy and live in a house, you can renovate freely (although, you’ll have to follow council regulations). You don’t have to worry about any owners’ corporation by-laws.
There’s also more room to spread out if you live in a house. Houses generally require more maintenance, but if you love building and gardening, then a house may be a good option for you. Older houses especially will need lots of maintenance (which is why we recommend buying new).
- Capital growth
Whether you’re choosing to purchase a property for investment or to live in, capital growth is arguably the most vital factor to consider. As we’ve said before when discussing picking the best location for property, you want to look for a property that’s going to increase in value as much as possible.
Notably land is considered to appreciate (increase in value) while buildings depreciate (lose value) over time.
If you’re purchasing a house, the great thing is that you own the actual land underneath the physical structure. This is not the case with an apartment. For the past 100 years in Australia, apartments experience about 50% of the growth of houses.
- Affordability and ongoing costs
Apartments are generally cheaper to buy. If you purchase an apartment rather than a house for your first property, you’ll be saving a great deal. You’ll have extra money to spend on improving the property as well as all the nice things in life like beautiful furniture and indoor plants.
However, there are ongoing costs with keeping an apartment – namely strata levies. These are what you pay to maintain the common property (facilities that everybody in the apartment block uses). You will be generally responsible for most repairs inside your apartment, but the owner’s corporation fees you pay will tend to cover maintenance of the rest.
It is also a good idea to take out home and contents insurance. If you own an apartment, sometimes strata will not pay for everything that needs repair or maintenance.
Regardless of whether you buy an apartment or a house, you will also have to pay council rates. In some states, councils have the power to seize and sell your property if you fail to pay rates on time.
There’s no right answer
Buying a house or an apartment will come down to the individual’s needs and the context of what they are looking for.
It’s important to do your own research and discover what is appropriate for yourself while considering all your circumstances. If you need any help, our specialist property advisors at Eda Property can walk you through the entire process of buying a property, whether it’s an investment property or your forever home.