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Why you should include units in your portfolio in 2026
In recent years, investors have become more open to high-yield properties that boost cash flow, to complement pre-existing long-term capital growth strategies.
Smash Property Investing founder, Nick Voegt, said demand has been driving an undersupply of units in many capital cities, causing yields to increase, while their relative affordability has meant a lower entry point for less experienced investors.
Voegt said that while units weren’t for every investor, they can be beneficial for the right individual in the right circumstances.
Should investors add units to their portfolios?
Voegt said that while the decision depended on each investor’s strategy, there were two main scenarios in which an individual might consider purchasing a unit.
He said the first was when investors couldn’t get into a high-growth market for a freestanding house, and buying a unit made the most sense due to affordability.
“Scenario two would be an investor that may already have a couple of high growth properties, maybe the cash flow is getting a little bit tight, that’s when pivoting to a unit would also make sense, typically to get a better yield,” he told SPI.
However, Voegt said, before hastily adding units to their portfolios, investors should ask themselves what will help them move forward in their ultimate goal.
“It’s typically going to be a case of, ‘I either need growth’, or ‘I need cash flow’. By understanding what that is, then you can go, ‘okay, I can then look at a unit in a capital city, it’s going to get me a better yield’.”
“So ask yourself those questions first - what is it that you need next in your portfolio? You might have no properties, you might have 10 properties. What you need next is going to be very different.”
How has the appeal of units changed over time?
Voegt said the idea that houses were a better investment than units had slowly shifted over the years due to affordability and supply-and-demand factors.
“I think that old sentiment of ‘houses are better than units’ is dying. It’s an old way of thinking. I think that’s a bit outdated,” he said.
“There was a time when Brisbane had a massive oversupply of units, and that wasn’t that long ago, maybe about 10 years ago, thereabouts. It was like, ‘don’t touch them, they don’t grow in value, they lose value’.”
In contrast, Voegt said there was now an undersupply of units in many capitals, leading to steadily rising yields in some capital cities.
He said that, looking ahead to the coming years, he expected yields to fall slightly as more people began buying units, pushing prices up and causing rents to slowly catch up over time.
“So I think yields will deteriorate slightly, but won’t take too long to catch back up again.”
From an affordability perspective, he said regional houses and capital city units would remain very similar, while yields will also be on par in the coming years.
“So it’s just a matter of the investor going, okay, well, what am I more comfortable with, buying in a capital city and it being a unit or buying in a regional centre and it being a house?”
How to be strategic when buying a unit
When deciding which unit to purchase, Voegt urged investors to understand the property’s condition and strata costs, which can lead to unexpected fees.
He said that by reviewing strata or body corporate reports, investors can learn about the property’s condition, including any upcoming major fixes that might increase costs through special levies.
“To give you an example, in Melbourne, there are lots of apartments that have issues with the facade, so they’re redoing that.”
“If you don’t look into that before you buy, then you’re going to buy the property, the strata cost is going to go up to cover the cost of the facade fixing and that sort of thing.”
When deciding on the location, Voegt said the ideal strategy will depend on each investor’s goal, but he broadly advised looking at apartments in high-demand areas.
“There’s obviously all the stuff you’ve got to check about the area, what are the demographics? What do transport options look like?”.
“Typically, you’d want to be looking at it in a decent lifestyle kind of area. So location is obviously important.”
Voegt advised investors to target high-income areas with office workers and strong tenant demographics, where residents will look after the property.
“For example, I bought a bunch of units close to the Perth CBD, in a place called Victoria Park. Good lifestyle, but very close to the city, good transport options,” he said.
He also advised against buying brand-new tall, high-rise apartments due to oversupply and poorer quality compared to older-style, two- and three-story units built in the sixties.
“They seem to perform a lot better. The newer stuff typically has not been built very well, as we’ve all seen.”
“Go with the older stuff. Typically, all the issues have been ironed out.”