Rookie investors are choosing to purchase this property type above others, and it’s all down to two key factors.
Blogger: Paul Bennion, managing director, DEPPRO
One-bedroom apartments are generally favoured by rookie investors as their first step on the property investment ladder.
A review of tax depreciation schedules that DEPPRO has completed for first-time investors during 2015 reveals that a high proportion of them are for one-bedroom apartments.
Rookie property investors are attracted to purchasing one-bedroom apartments for a number of reasons.
Firstly, they offer a lower-cost entry point into the property market compared to buying a larger property.
For first-time investors with limited financial resources, this is an attractive option especially if the apartment is located in an area with high capital growth potential.
Another attraction of one-bedroom apartments is because there is a high demand for this type of rental accommodation, as more people are living alone today due to major demographic changes in our society over recent years.
These two factors – lower-price entry cost and high rental demand – mean that rental returns for one-bedders are favourable for rookie investors.
It also gives new investors experience in the property market, while at same time not financially over committing themselves.
In addition, new one-bedroom apartments also deliver first-time investors generous tax deprecation benefits that assist with the overall cash flow.
Developers are responding to this demand with new apartment complexes now having a greater proportion of one-bedroom apartments compared with a decade ago.
If you are considering buying an investment property for the first time, then you should consider the following points: