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Don’t bet on (new) units to make you rich

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Your Investment Property | 07 May 2015, 01:40 PM Agree 0
If you’re tempted to buy into the hype of a new unit development with the hope of making big bucks, you may want to reconsider your strategy, according to a property analyst.
  • Zero Hedger | 07 May 2015, 10:40 PM Agree 0
    This article is as helpful as tits on a bull.

    New units are low investment value because they are SO EXPENSIVE for the rental return! duh..... genius is the one pointing this out! lol.

    New units are made for the chinese investor trying to get their money out of china before the bubble pops there! thats why they are overpriced. Couple this with the lunatic government/councils approving developments like its going out of fashion and you have a recipe for importing a "fake economic" recovery. But it will be short lived and run out of steam sooner rather than later.....and all suckers who got sold down the property road to riches will be left high and dry; Defaulting and wondering where that agent that hyped the sales up and the property experts touting the wonders of property! lol.....
  • Jim | 08 May 2015, 02:40 AM Agree 0
    Don't know how helpful are tits on a bull.
    Capital growth aside, taking into account depreciation, units have far higher rent return than houses which have a gross return as miserable as 2.5%. Anyway spuikers are still flogging property "investment", many will end in tears.
  • Frank | 08 May 2015, 06:42 PM Agree 0
    I think Margaret Lomas in one of her property investment books has suggested that both houses and units tend to average out the same in the end.

    Houses tend to have lower rent yields but higher capital growth.
    Units tend to have higher rent yields but lower capital growth.

    I track my investment returns totalling net rent estimated capital growth based on recent sales.

    In the same suburb I have an old house which has returned me an average of 20%pa over the last 10 years - and 3 units that have returned variously 9, 15 & 43%pa over the same period. So - units doing better and worse than a house.

    Of course if you are suckered into an off-the-plan new unit investment that goes bad, I can't help you - they're a bit of a gamble - some win, some lose.

    New units tend to suit people on high income who want set and forget investments with low maintenance.
    Old houses tend to suit DIY active renovators who want to get their hands dirty and earn capital gains.

    Swings and roundabouts - in the end - we're all dead.
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