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Your first investment property: house or apartment?

While buying your first investment property may be an exciting decision, it comes with its own set of questions. One of the main questions first-time property investors have is: house or apartment? 

If you have decided to jump onto the property investment ladder, there are a few things to consider before going forward. So, here are the main pros and cons of investing in a house and an apartment.

Investing in a house


One of the first things that attracts property investors to a house is higher capital growth. This is because land generally increases in value overtime, and houses tend to occupy more land than apartments do (however, it depends on the location and market when you’re investing).

Then there is the ability to improve the value of your home through renovations and subdivision, which may not be easy or possible with an apartment building and its residents involved. 

Depending on the characteristics of the investment property you purchase, a single-family dwelling may attract longer-term tenants. Usually, families like the stability of a longer stay, with the added benefit of some outdoor space to entertain or for the children to play. 


While houses can be a great investment, they tend to be a more expensive option than apartments, which may hold back first-time investors. 

According to CoreLogic, houses also generally have a lower rental yield, which is the rent a property can provide over a year, expressed as a percentage of its purchase price or value. While rental yields are not the only consideration, they can help you determine the property’s value and potential. As a general rule of thumb, yields are higher in more affordable areas, but the return needs to be weighed up alongside other factors, like maintenance, tenants, expenses and capital gains. Get in touch to learn more.

Lastly, when it comes to houses, you are the sole investor, so you are responsible for all the maintenance expenses, including upkeep costs, insurance premiums for the property, and other costs.


Investing in an apartment


Apartments are becoming increasingly popular with first-time investors because they can be comparatively more affordable than houses. 

Another attractive factor is the improved apartment lifestyle in New Zealand, where apartments are becoming “more sophisticated, community-oriented, and inspiring.”

Lower maintenance expenses can be a significant advantage of investing in an apartment, since the costs are generally shared between residents of the building, and a body corporate manages common areas. However, if there’s a problem in your apartment rather than in a shared area, you’d still have to pay for repairs to your unit, and if the issue ends up affecting the whole building, you may need to take care of those costs too. 


Apartments usually have a lower land value because they come with less associated land, which may lead to lower capital growth than houses. However, keep in mind that a range of factors can affect how your investment plays out, including location and market conditions. If you’d like to discuss your investment goals, and get a full picture of what to expect, please get in touch with us. We are here to help you make informed decisions.

Other common apartment drawbacks are less control over improvements, since the body corporate is involved and you may not always get required permission, and changing supply in your area over time, which could potentially position you in an oversupplied location, affecting your return on investment.

For some more things to consider before investing in an apartment, check out this list by

Overall, both property types have their pros and cons – but it is a good idea to get professional advice either way before making a decision. And as advisers, we are committed to helping you towards your goals.


Like some advice?

Get in touch today. As financial advisers, we understand that buying property for the first time is an important decision. We can help answer all your investment questions and be with you throughout the process.



Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.

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