The Pros and Cons of Investing in an Apartment in Melbourne
The capital of Victoria is the second most expensive city to live in. House prices are skyrocketing with each passing year. The rates will further increase in the next few years, so it is becoming a hotspot among property investors and home buyers.
One of the most viable options these days is a well-constructed apartment. Modern-age apartments are a perfect property investment option compared to houses and cottages. The prices are reasonably low, and you can make a good investment in the long run.
However, it is important to consider multiple factors, such as location, maintenance and hidden costs, when buying your first apartment. So, it is good to contact the best real estate agent in Melbourne who can meet your specific needs without giving you a hint of stress.
To make the right decision, have a look at the key pros and cons of investing in an apartment.
Pros or Benefits:
Have a look at the following benefits of purchasing an apartment in the capital of Victoria:
1. Affordable Prices
In most regions of Australia, the average price to buy an apartment is low than the median house price. According to the 2022 survey, the median price of an apartment in Melbourne was around $519,000.
If you have a restricted budget, apartments make an ideal property investment choice. It is ideal for first-time home buyers, small families, retired couples and small families. You don't need to break the bank to buy your dream home. The best part is that it can help you leverage the benefits of reinvestment.
2. Location
Do you want to live close to the CBD or in the interiors? If yes, then investing in an apartment is an ideal option. In fact, property investors can easily find new occupants or renters due to close proximity to business markets and commercial markets. So, buying an apartment in the right location can help you maximise profits in terms of rental income.
3. Low-Maintenance Investment
One key benefit of investing in an apartment is its low maintenance. When you buy a house, you have to maintain the interiors and exteriors of the property.
On the other hand, the maintenance of apartments are organised by a committee. You just need to pay the maintenance fees, and they will take care of everything, including the sprucing of common areas, building and lift maintenance, electricity and water.
The Cons or Disadvantages:
Have a look at the key limitations of buying an apartment:
1. Restricted Capital Growth
According to the latest study, the Victorian apartment market has witnessed an oversupply. This has slowed capital growth compared to houses in the hotspots of Melbourne.
2. Less Funding Options
Not all financial banks are interested in lending money for apartments due to the oversupply scenario. Therefore, you may find it difficult to get the desired amount of loan at the lowest interest rates. There will be stricter lending criteria. Therefore, focus on building a good credit score.
When creating an estimated budget for your new home, consider upfront and hidden costs in the home-buying process.
3. Vacancy Vulnerabilities
Believe it or not! Vacancy periods can impact your rental income if you buy an apartment for a long-term investment. Again, the oversupply conditions and frequent fluctuations in the rental market could make it difficult to find potential tenants.
You can contact a reliable real estate agent in Melbourne to buy and sell properties without a hint of stress.
Wrapping up
Consider these pros and cons when investing in an apartment in Victoria, Australia's capital. This will help you make the right investment or home-buying decision within your estimated budget.
