Why do apartments make great investments?

Sep
6
2016

Property investment requires a great deal of research. You aren’t just looking for something that people will love – you’re looking for a home that will achieve your financial goals. This means looking at the performance of specific types of property, and setting out a detailed plan for how much money it can make in the long term.

When it comes to apartments, there are several reasons why so many people opt for them instead of standalone houses.

What makes apartments a fantastic investment opportunity?What makes apartments a fantastic investment opportunity?

Friendlier entry price points

It’s not secret that Sydney housing values have gone through the roof in the last few years. However, apartments tend to be on the more affordable side, which gives property investors a lower entry point into the market. Buying into new developments gives you this without sacrificing any modern, high quality features either.

CoreLogic RP Data’s monthly value indices from July 31 show that the median value for houses in Sydney was nearly 33% higher than that of an apartment. Across the board you’ll find that apartments, even top quality ones like Waterfall by Crown Group, offer investors more bang for their buck.

Better return on investment

One of the key metrics investors look at is rental yield – how much profit a property will make week to week. As values rise and weekly rent fails to keep pace, yields tend to shrink across the board. However, CoreLogic RP Data research from April this year shows that units have an average yield of 4 per cent in Sydney, while for houses this is only 3.1 per cent.

When you are focusing on positive cashflow returns, apartments are the way to go.

It suggests that when you are focusing on positive cashflow returns, apartments are the way to go. Further information from Residex shows that capital yields for units in Waterloo sit around 5 per cent, while houses attract yields closer to 4 per cent in this part of the city.

Strong value gains

The tradeoff for apartments is often that capital gains are less forthcoming than if you buy a house. However, CoreLogic RP Data’s indices how that at least in Sydney, this isn’t necessarily the case. Over the year to July 31, units went up in value by 9.41 per cent – slightly better growth than even houses.

If you’re looking at making an investment in the Sydney property market, the benefits of doing so with an apartment are clear. When you want to really maximise those returns, make sure to look at the top quality luxury offered by developments from Crown Group.

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