Flats versus houses

[Gerrard]

I'm interested in opinions of flats versus houses. My view is that flats (i.e. blocks of 3 or more) will generally:

- provide higher cash returns
- get less capital growth
- require a higher level of equity (generally 30% versus houses at 20%)
- be in areas of lower cost housing with the potential for tennant problems

A friend's experience with flats has been pretty good (i.e. great cash returns) with little other problems.

I'm interested in other peoples opinions'and experiences with flats.

Gerrard

[RentMaster]

I have both flats and houses, but would prefer to stick with houses in future. I have had some bad experiences with body corporates of late.

Another problem with units, is that if one unit starts to look shabby, it tends to pull the rest of them down to that level. Of couse a good body corporate would not allow this to happen.

But you are right about the good return on investment. The purchase price tends to be cheaper than a house, but the rents tend to be about the same.

My 2c worth.

[donna]

We have apartments + houses and definitely prefer houses. Started out with the OTP apartments. With houses you also get land, and I agree with RentMaster on the Body Corporate issue. Seems to take forever to get any progress and in the mean time it's the owners that suffer.

Cheers,

Donna

[Aceyducey]

I don't think it's a 'versus' thing. You don't need to choose between them, just buy the properties that provide the rest return according to your criteria.

Two factors that are important to bear in mind are:

Control - you normally have more control over a house than a unit in terms of renovations and improvements (exterior/extensions/subdivisions & gardens)

Land Value - land tends to appreciate, property depreciates....hence it makes sense that properties with larger land content will see greater capital growth.....however this is not always true and certainly should not be taken to the logical conclusion of being land with no property on it

Cheers,

Aceyducey

[muppet]

Hi Aceyducey

Welcome to the forum. I am looking forward to the thought provoking answers to people's problems that you give.

We have a couple of flats but they are stand alone and joined by carports so don't have the problems that a single building full of flats will have.

Tried accessing SS's chatroom last night and got lost.

Regards

[MissWorld]

I like for flats for as xplained above higher returns etc.. however I only purchase those where my long term goal is to own the whole block which of course means I have total CONTROL !! I can then proceed to add value by freeholding titles etc etc, and it is surprising how quickly you can achieve the ownership of a whole block by just picking them off one by one...albeit the last one is inevitably the most xpensive that is if the vendor realises who you are and knows yr need