Most investors nowadays are trying to find the best solution that will allow them to make a profit. The question that they are asking themselves is whether buying apartments is an excellent way to earn more money than other real estate possibilities.
Some of them think that apartments are a great way to boost the investment portfolio because it is a more affordable solution than buying commercial properties and traditional houses. In most cases, investors will stick to what they know best.
Visit this site, if you wish to see examples on what you should do with your apartments. Have in mind that since most people are migrating from rural areas to towns with high density, the need for flats will always be big, but you have to understand how it functions.
- Demand, Demographics, and Affordability
One of the most significant advantages of investing in apartments is their affordability when compared with other properties that you can purchase as an investor.
It means that most of them can easily afford to find an apartment in some major regional market or capital city for the lower price and after renovation, you can resell it or rent it based on your preferences and convenience.
In the last few decades, the apartment living has become more popular since the demands for living in major cities increased gradually. That way, people are closer to work, hospitals, shopping malls, transport hubs, cafes and universities, which increased overall demand.
You can find more single person households, more young renters, more downsizers, more empty nesters and professionals that are choosing this particular lifestyle instead of living in houses.
- Rental Yields and Capital Growth
Have in mind that population of major capital cities is increasing rapidly, so more and more apartments are appearing on the market with the idea to meet the demand for this particular type of lifestyle in town or urban location.
Have in mind that apartments have shown the same trends similarly as houses when it comes to capital growth, especially if you are living in major cities.
Finally, you do not have to be considered as the poor cousins from apartments when compared with your family that lives in households.
At the same time, since demographics are changing, the demand for this particular type of living has increased, and rental yields achieved better outcomes especially for investors when it comes to positive cash flow and holding costs.
- You Can Buy Apartments Off The Plan
Most investors nowadays see the advantage of finding an appropriate apartment off the plan so that they can set their feet in the door for the proper price tag and potential to make capital growth since we’ve mentioned that this market is in the rise.
You can purchase an apartment at no holding cost during the construction phase so that you can earn a more significant profit in a few years after it gets constructed.
This particular type of apartment developments is highly attractive for tenants especially if they are built in a great location that will allow them to have better access to recreation areas, shops, work, hospitals, universities and transportation options.
At the same time, most tenants are expecting to have facilities inside such as rooftop terraces, gyms, open courtyards, pizza ovens, and other tool sheds, so developers can easily include these facilities so that they can attract investors and downsizers.
- Positive Cash Flow
As soon as you decide to purchase an old or new apartment, you can choose and determine which one is the best for you based on the better cash flow than before. Most investors tend to prefer a positive cash flow property so that they do not have to create additional expenses.
At the same time, investors tend to presume that strata fees can quickly reduce their profits and that is why they neglect this particular option. However, tenants tend to pay a premium for additional facilities, location, views and design that they will get.
Check this link: https://www.investopedia.com/terms/c/cashflow.asp to learn more on cash flow and how to make it positive.
Even if you decide to pay strata fees, everything that you will lose from your property includes equipment; plant write-offs. This particular depreciation claims on new apartments can provide you tax benefits especially if you wish to make the geared property into a cash flow with ease.