As a real estate investment consultant and buying broker, I have purchased many homes and apartments for real estate investors. I am constantly asked whether I should buy a house or an apartment. Which real estate investments are most effective?
So I thought I was going to shed some light on this.
Objects as investment real estate:
Since rental income is usually higher than that of residential real estate, this is attractive for investors in real estate with positive cash flow. When buying apartments, villas, townhouses, apartments, etc., the following important points should be taken into account as investment property:
Higher capital gains are usually more achievable in smaller blocks (less than 10-20 units per block). This is mainly due to the rarity and lower maintenance costs.
Higher capital gains are usually more achievable in blocks that are predominantly occupied by owners rather than investors. This is mainly due to lower turnover and better real estate maintenance.
The higher the allocation of land to a particular unit in the block, the more valuable it will be and the greater capital gains it will achieve in the future. Single-storey houses and apartments with yards and gardens will have a greater capital gain than others that are not in the same apartment building.
The closer to amenities, transport, employment and entertainment, the higher the growth of the capital as a whole (try to stay within 10 km of the central business district of the capital, but not less than 500 m, as it is usually too close to the city and crowded with people.
The only problem is to choose which units with high capital gains to buy, and create rental income with the help of smart repairs.
Homes as investment properties:
Since homes tend to have a higher CG than units, historically speaking as a real estate investor you should try to choose to buy a home with high capital gains, but be sure to choose wisely to get rental income. A higher and tax deduction (if for investment) with smart repairs, as it will increase rental income, which is one of the disadvantages of homes compared to units as a real estate investment.
Important points to consider when buying land for apartments, houses, villas, townhouses, apartments, etc. as investment property:
Homes traditionally have a higher center of gravity due to the greater division of land, and the closer to the city, water, amenities, transportation, employment and entertainment, you are more likely to get higher capital gains (i.e. areas with land shortages)
Homes are more flexible for renovation or development of real estate than units, which means that value-added and valuation factors are much more important.
More living space – gardens, large rooms, etc.
Pinot Tedesco has more than 15 years of experience supporting real estate investors in buying and developing real estate. Pinot Tedesco is a qualified real estate appraiser and a very experienced broker-buyer and developer of projects. Pinot Tedesco regularly writes in the media on real estate and investment, and comments on investments and development in real estate, as well as the creation of wealth through real estate.