5 Types of Investments


5 Types of Investment: 5 Types of Residential Investment Properties

Ready to invest in property but not sure what type of property to buy, when buying an investment property the type of property you buy impacts the long and short term returns on your investments.

There are five of the different types of residential investment properties and how they affect your bottom line when you choose them as your investments. We will look at five different types of investment properties, rural properties, vacant land units, houses and finally duplexes and townhouses.

an early tip though keep in mind that overall it is the land that goes up in value where buildings to depreciate over time rural properties when considering rural properties as an investment you have to keep in mind the maintenance of the property who is mowing the lawns and

maintaining the grounds getting tenders to look after a large rural property can often be a nightmare for the property manager the cost for maintenance often has to be carried by the landlord which can decrease the cash flow and return of

the property a while rural properties have a large design content that can appreciate the income from the property compared to the value is often quite low so while rural land can be a great investment strategy if you get the

location and the future zoning right this often requires specialist knowledge and can be above the understanding of most residential investors they can land on the premise that land goes up in value and buildings go down then banking

in the right area may seem an excellent investment strategy after all it’s often half the price of a completed property however in most cases land does not provide an income furthermore under Australia tax rules generally if an

asset does not provide income than the costs are not tax-deductible and therefore all the expenses are met with after-tax earnings many banks will also learn a lesser percentage than on homes overall holding land can be an excellent

investment for those with very high incomes or equity positions but are not for most property investors units units apartments condos or all names used in different areas for essentially what we would describe as a multi-homed complex

these are typically four or more sometimes up to 100 residences in these complexes you typically own a share of the land according to the number of units in the complex as such often a greater percentage of the

purchase price of your investment is made up of the buildings as opposed to the land on the positive side units often have lower council rates or land tax where applicable and I generally well located two facilities city centers

and public transport it is for these reasons that units can be good investments and can go up in value multi-unit complexes usually have a body corporate or an owner’s committee they supervise the rules maintenance and

repairs for the outside of the building and the grounds the control of your investment is partly governed by that committee in our experience though there is always one owner in these committees that frankly is a dickhead we highly

suggest you invest in complexes with six or less units less owners less chance of dickhead and finally I suggest staying away from complexes with lips and swimming pools as they can be costly items to maintain increasing body

corporate fees and decreasing your income in general we don’t recommend investing in multi-unit complexes but they can be right in the right area the right circumstances for the right person houses houses are best described as a

freestanding building on a freehold block of land I personally prefer houses between 350 to 500 thousand dollars this is based on a combination of a number of factors these are future capital growth rental returns capital or deposit

required and the general demand these types of properties have for both tenants and homeowners in case you ever want to sell this is provided they located in areas and have a diverse employment base with ample facilities

and infrastructure nearby by this I mean a town or village center local shops schools easy road access in and out government facilities beaches and parks one of the advantages of houses is your own one hundred percent of the land and

as such we really prefer land parcels with a minimum size of 400 square meters but no greater than a thousand square meters we think the best configuration is three to four bedrooms two bathrooms and ideally double Cara comedy

a fenced enclosure yard for children and pets can be highly desirable for tenants finally the flatter the block the better we always suggest clients buy homes but a new or near new at least bills since post-1990 this is to take advantage of

the government depreciation changes at that time more details on that in later videos always considered the maintenance costs in the first five years of ownership when buying houses are our preferred method for property investment

without a doubt duplexes and townhouses we save this for last because these are a mix of units and houses duplex is best described as two homes built on one free whole block of land sometimes with their own titles often they share a common

wall also known as a party walk but they don’t have to most attractive duplexes however are two independent freestanding homes on one title the preferred configuration is again three bedrooms two bathrooms and a double garage a

duplex can be attractive because you won’t at least fifty percent of the land usually with identified yard that is fenced and secure entry level prices for duplex can often be two-thirds of the price of a house in the same area

because of the reduced land component they do however typically provide better percentage rental returns and houses and are eligible to receive the same tax incentives as houses we like to try and learn both duplexes on the one land

title this means you’re in one hundred percent of the property but you get twice the weekly rental return small townhouse complexes six or less can offer similar outcomes to a duplex but with reduced overall values per town

home based on owning a lesser percentage of the land we do not recommend investments in townhouse complexes with more than six units largely due to the body corporate circumstances in conclusion we suggest that freestanding

houses or duplexes are the best residential property investments they provide the highest percentage of land ownership while considering overall income and cow growth as well as the ongoing

maintenance and you don’t have to deal with that difficult body corporate person I don’t forget we’ve already prepared a property criteria sheet for you that will help you select the right property you can download that sheet by

clicking on the link below the video enter your name and email and you should find the dinner inbox straightaway next our video is on timing when is the right time to buy your first property or your next property in the meantime thanks for

watching rural properties the headings in their way down how many smiling happy thoughts


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