The Best Kind Of Real Estate To Invest In: Houses or Units

When buying a unit pay attention to the market as many cities have oversupply issues, which means that people buying off the plan could, in fact, overpay for a property that may decrease in value.

But buying off the plan isn’t always a negative as this can mean that buyers can claim depreciation and pay lower stamp duty.

Apartments in small blocks of units are more sought after than apartments in larger blocks as they often have a better feel to them.

Houses will increase in value compared to units, as houses are built on land owned by the owner, whereas the unit owner has a strata title but does not own the land. Inner city suburban land regularly sees increases in value, due to it’s closeness to the city and amenities.

A good idea for real estate investors is to buy an old property or a block of land and build an apartment block on the land and either sell it or lease the apartments out to renters and build a property portfolio.

Flipping residential properties is another option available to investors that want to invest in renovating properties and then sell them for a profit. Old houses or units with cheaper fittings are good candidates for this as many buyers become enthusiastic about properties with modern kitchens and bathrooms.

The Best Kind Of Real Estate To Invest In: Location, Location, Location

You might find a property bargain but if you are going to sell the property at a later date, families look for properties in a good location for all members of the family. First, properties must be adequately serviced by shops, restaurants, and services. Next, families look for properties that are within travelling distance for their children to go to school. And it must be an established suburb that is serviced by tradesmen to service appliances and utilities.

The Best Kind Of Real Estate To Invest In: A Property That The Market Is Buying

Buying a mansion instead of a family home is not good business sense, as only a small section of the community will be in the market for this type of property. Take into account what the median price is for a property similar to the one you are inspecting, and aim to pay close to this price to ensure you don’t overpay.

The Best Kind Of Real Estate To Invest In: Protect Your Interests

Don’t buy property in your own name otherwise if you get sued, you personally will get sued. It is better to set up a company or Limited Liability Company (LLC). It is even better to set up a company for each property in your portfolio as if one property has problems, the rest of your portfolio stays intact. If they sue your company you have more options in handling legal matters or your company can file for bankruptcy without incurring a major headache.

Entering into the real estate market it is a good idea to build a portfolio of properties and set up legal structures to safeguard your property portfolio. As commercial real estate properties are a harder investment vehicle to master, the best kind of real estate to invest in are residential properties.