Investing in the right property at the right time can prove to be beneficial and cost effective in the long run. While real estate investment is a money spinner in itself, it is necessary to search for the best opportunity beforehand in order to yield maximum output and revenue from your investment. The question remains – a house or an apartment? What is the best choice for you?
While both houses and apartments have their fair share of pros and cons, the decision lies in your hand about what situation and scenario proves to be more fruitful for you.
Pros & Cons of Buying a House or an Apartment
1. Cost Effectiveness
The first and foremost point to consider when investing in real estate is the cost and value of the property. The cost of a house is generally higher than an apartment, even if they are of the same size and located in the same locality. This is because having a house gives more space, liberty, and security to the homeowner, and also because the real value of the property lies in the land, not in the building. Hence, if you were to buy Luxury Real Estate in Las Vegas or any other location, that property would be much more valuable, despite the increased costs. However, the high cost of purchase may render the sale of your house difficult because it will be targeting a selected clientele only, as opposed to an apartment that is affordable for the masses. Therefore, if you are looking for a sound and bigger investment, buy a house. Or if you are a first-time buyer with a fairly limited budget, go for an apartment.
Whether you are intending to sell your property or rent it, the important factor is to get maximum return and profit on your investment as much as you can. Houses have an upper hand when it comes to sale because when real estate is booming and your property is premium and maintained, you can get a handsome share of money as its worth. On the other hand, if you are looking to rent your property, it is easier to get a tenant for an apartment than for a house. Hence apartments are an ideal option if you do not want to sell your property and still want to use it as a regular source of income.
3. Maintenance Factors
Generally, owning a house requires much more maintenance as compared to an apartment. While the apartment is a part of a big complex and its maintenance falls under the supervision of the building supervisor, maintaining your house is by and large your own responsibility and you are accountable for all the charges associated with it. Hence an apartment investment poses less maintenance costs than a house.
In a nutshell, the discussion can be summed up as:
Affordability Low High
Control over property (extension etc.) High Low
Maintenance High Low
Rental Income Low High
Profit on Sale High Low
Allan has been writing about investing for quite some time now. Allan has a BA in Business Administration with a speciality in banking and has made quite a few successful investments over the years.
Allan’s favourite topics include retirement planning, self managed super and money savings strategies.