If you’re looking to enter the real estate investment market this year, a strata property could be the right move.
Blogger: Andrew Staehr, Archers – the Strata Professionals
Property prices are expected to plateau this year, with first home buyers set to take advantage of a slowing market. While first home buyers traditionally favour the ‘fixer-upper’ house, a growing number of property debutants will look to units to maximise their investments.
Many first-time investors assume that houses are more profitable due to their size and land value, but apartments are quickly becoming a popular way to access the high capital growth traditionally associated with houses. One reason for this is that apartments reap strong cash flow, an important benefit that entices many.
The patterns of growth in property values have changed significantly over the past few years, with many Australians now choosing to live in inner city precincts, closer to work and the attractions of urban life.
Apartments offer an affordable entry point into the market in locations previously outside many investors' price ranges, which is another reason for their growing popularity.
Highly sought-after locations are more attractive to investors, offering higher rental yields and investment security. This essentially means that investors can purchase smaller, more affordable properties in busier suburbs and receive higher cash flow. The lower price point of units also allows investors to build a diverse property portfolio more quickly.
Another reason why Australians are considering strata investment is the upkeep and maintenance performed by the body corporate. If you own a house, all maintenance issues are your responsibility, whereas the maintenance and care of an apartment building and its surrounds are the responsibility of the body corporate.
Investors can budget for maintenance and body corporate fees from the outset, thanks to easily accessible strata property histories.
Informed investment is a security in itself. Strata searches and inspection reports can be requested prior to purchase, providing detailed records of property evacuation and health and safety requirements, as well as general meeting minutes and building reports.
If you’re looking to enter the investment market this year, then it’s definitely worth considering a strata scheme. The lower price and minimal maintenance requirements will see you enjoy a higher cash flow.