With Melbourne’s median house price soaring past $1m in the June quarter, the great Australian dream of owning a suburban home on a quarter-acre block is now out of reach for many prospective homeowners.
Consequently, we’re seeing a knock-on effect that’s pushing priced out buyers towards apartments, boosting Melbourne’s apartment median towards the $600,000 mark.
That’s good news for investors who have an apartment or two locked safely away in their portfolio. But what if you’re just starting out on your property investment journey, or looking to add to your existing portfolio, and your bottom line is a deciding factor (and when isn’t it)?
Traditional thinking has generally leaned towards detached dwellings, largely based on land value and the potential for long-term growth. But – price point aside – there are plenty of reasons to add an apartment to your investment portfolio right now.
For starters, even with prices at pandemic-defying market conditions, savvy investors can still pick up an apartment for as little as $350,000 in some Melbourne suburbs – making them an affordable and sound investment strategy. And with the upward price trend tipped to continue longer term, apartments are an even more enticing proposition for investors.
EVERYONE’S DREAM IS DIFFERENT
Not everyone’s great Australian dream is a big house on a big block. According to the Australian Bureau of Statistics more Australians than ever are actively choosing to live in apartments. In fact, the most recent Census data shows the number of occupied apartments has increased by 78 per cent over the past 25 years.
Why? Well that’s because apartment living appeals to a wide range of people – from young couples to downsizers – and for an equally wide range of reasons.
Chief among these is lifestyle. Apartments are generally located close to highly desirable and convenient amenities, such as public transport, cafes and restaurants and entertainment options. This translates into strong and reliable demand, solid leasing potential and consistent yields for investors wanting to take the plunge.
- Prime location The affordability of apartments allows you to buy into highly sought-after areas where you couldn’t otherwise afford a house.
- Two for the price of one You may be able to afford multiple properties to diversify assets, provide higher rental income and spread risk.
- Alluring amenities Many new apartment complexes include gyms, pools, spas and other ‘Insta-worthy’ amenities that add to property appeal and instantly boost leasing potential.
- Maintenance costs The cost of building repairs and insurance are shared through an apartment’s strata title, and the body corporate manages and maintains common areas for an annual fee, which can lower general maintenance and upkeep costs (not to mention being tax deductible if the payments contribute towards body corporate administrative funds and general purpose sinking fund levies). Conversely, upkeep costs and fees associated with high maintenance facilities are actually a good reason to avoid purchasing in a block with an array of amenities – but that’s another article or something to discuss with one of our property mentors…
HOW THE PROPERTY MENTORS CAN HELP
Even if you only want one investment property under your belt, doesn’t it make sense that this one property is the right one? Poor planning and lack of research can leave you with an underperforming property that stifles your chances of growing your portfolio further.
Our team of investment experts work together, helping motivated investors to develop a clear, actionable and individually tailored property investment plan. Whether you’re just starting out, or already on your property journey, we can provide the guidance you need.
Contact The Property Mentors for a discovery call today. We’re confident that we can help you grow your portfolio further.
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