Should I invest in a house in a regional area, or spend the same amount of money on a unit closer to the city?
Everyone needs somewhere to live, and if the rent is reasonable, houses will attract tenants who are families, and therefore not likely to have a high turnover. If selected correctly, this type of property will appreciate in value.
However if the property is not located in a high-growth area, the capital growth may not be adequate to justify this.
Also houses usually generate negative cash flow and cost more to maintain, but if you can handle the costs it’s an excellent choice.
Units are ready to be rented out, especially to young people who have just moved out of home.
The problem with units is you are in direct competition with the rest of the landlords in the same building, and your ability to rent is determined by how low your rent is in comparison to other units within that block.
The calibre of the property and location of the suburb will determine the quality of the tenants, and the number of vacancies you have.
Victor Kumar, director, Right Property Group