Ask anyone and there will always be a huge argument about whether houses or condominiums are better investments because many people think that houses are superior to condominiums and vice versa. It is not about which is the best home type, it is about which one is the right property for you!
In fact, both residences have a very important place in your portfolio as long as they are the right type of property.
Houses versus Condos
Typically, with houses, you have the land component plus the ability to value-add internally and externally.
You also may have the upside of zoning advantages to allow you develop the site and construct additional dwellings. Houses generally also attract a different demographic such as families, too. However, more and more families are choosing condominiums over houses because they are often in better locations.
What I mean is that with condominiums and townhouses, they are usually built on better infrastructure and are located on transport hubs and near shopping areas already, so they can have better access to services.
Another advantage to condominiums and townhouses is they traditionally have a better yield but you must ensure you are investing in a property that has a low cost to operate [condo fees].
When it comes to units and townhouses, my preference is to invest in ones that are walk-up, which means no elevators or lifts, which are not located in large complexes.
A question of price
Some people still believe that if it is a question of price, then perhaps they should invest in an affordable house in an outlying suburb rather than a condominium or townhouse closer to the city.
However, again, that is the wrong way to approach it.
That is because it really still comes down to your own unique financial situation.
If you are someone who does not have a lot of disposable income then maybe a unit or townhouse might be a better scenario because of the possibility of better cash flow.
From a portfolio point of view, if you are a multiple property owner, I believe it is necessary that you have a mixture of both houses and condominiums.
Having a mix will help you balance your books in terms of cash flow.
Therefore, as long as you buy the right type of property, and have balance in your portfolio, either residence types could be an ideal investment for you!