Propell’s guide to APARTMENT investing

Are you on the lookout for an investment property?

Often, apartments can go under the radar for prospective investors, simply because there’s a massive priority placed on investing for land value.

And even though land value is important, and it’s something I often mention as part of any property investment strategy – apartment investing shouldn’t be overlooked.

From Brisbane and the Gold Coast to Melbourne and Perth, our team has been out on site, from foundation to practical completion, getting a feel for apartments that may be perfect for our clients.

Like with any decision in life, it’s important to weigh up the pros and the cons, in order to gain clarity into whether that decision is right for you – and it’s no different when it comes to investing in property.

SO, let’s chat about apartment investment – why it can be a great option for YOU, and what the pros and cons may be for your unique goals and circumstances.

• Advantages

  Apartments are really great – we’re lucky enough here in South-East Queensland to have some of the most amazing views and locations, and as a Goldy local myself, it’s pretty safe to say, on the whole, we love the apartment lifestyle.

  From a strategic perspective, apartments can be excellent ways of jumping into the property market, allowing you to find your feet and build up a stable and successful portfolio.

  1. Location

  As a general rule, apartments tend to be built in more accessible, centralised, popular locations – given the whole premise of an apartment building is to save land space.

  As a result, apartments are shooting up in areas of growth all around the country, in quality locations, with plenty of scope for increasing demand.

  And guess what!

  This means they tend to fit the bill for what we’re looking for in a great location.

  At Propell, we tend to focus upon property in locations that have a combination of three things:

  • Quality infrastructure (hospitals, public transport)
  • Accessible Lifestyle (beaches, parks, sports and entertainment facilities)
  • Growth (population and economic) With incredible growth opportunities for property investors across Australia, it’s no secret that apartments can offer all that we need from a location perspective.
  2. Facilities

  Another great thing about apartments is the lifestyle and facilities that can be enjoyed.

  From secure parking and storage, to gyms, saunas and pools, the building’s facilities can provide an additional layer of attractiveness to potential tenants.

  3. Management

  When it comes to facilities and the building itself, we love the fact that you, as an investor, don’t have to worry about upkeep and maintenance. This is where your strata title and body corporate management come in handy.

  Despite it coming at an extra cost, this management service ensures the stress and worry of maintenance and other services aren’t on your plate, saving plenty of time and stress.

  4. Value

  Because of their smaller size and lack of land value, apartments allow you to get more bang for your buck.

  And if you know the team and I, you know how much we LOVE taking solid steps to create tangible value in each and every investment property. Not to mention how much we love ensuring everyone can make the most of their opportunity to invest in property – regardless of budget.

  From a strategic perspective, apartments can be excellent ways of jumping into the property market for the first time, allowing you to find your feet and build up a stable and successful portfolio. They’re also a great diversification option for experienced property investors.

• Disadvantages

  As much as it’s important to understand the benefits of apartment investing, we should also discuss the potential downsides – in order to fully understand the situation and allow you to make the most informed decision.

  1. Value

  You may have noticed that value was one of the pros when it comes to purchasing an apartment for investment.

  The important thing to know is that it can be a double edged sword – value can also be seen as a negative for some prospective investors.

  Naturally, the less land, the less opportunity to create equity in the long term as the equity growth in the property doesn’t rely specifically upon an increase in land value.

  2. Overdevelopment

  This is where location and research becomes SO important for apartment investing.

  Given apartments can be built relatively quickly (compared to houses), supply booms can occur. As supply increases, it ensures demand settles, as people are able to find homes with ease, ultimately leading to the possibility of lowering prices.

  In Australia, this is something that we tend to see quite infrequently, as a general rule, however it is still worth being aware of as an investor, because oversupply can cause disruptions to growth cycles in smaller markets or specific areas of a city.

  Want to learn more about the decision between purchasing a house or apartment? Check out our recent blog!

There’s no doubt about it, without support and confidence, it can be difficult to take that first step into something new. It’s no different when entering the property world.

At Propell, we’re here to help you each and every step of the way – from developing your tailored strategic plan, to finding your first tenants.

Are you wondering whether an apartment is the right investment option for you?

Send through an enquiry HERE, we’d love to help you out!