Are Properties In Large Complexes a Good Investment?
Dilleen Property Group 2021
The topic of buying a property in a large complex is highly controversial. However, in my opinion, yes it is okay to purchase a property in a large complex, depending on the circumstances if it is for an investment property. Many investors and property companies will advise you to avoid them at all costs. Often, the reason why they say this is because they believe people don’t enjoy living in them, they have higher vacancy rates, and higher Body Corporate fees.
I have personally bought townhouses and units in large complexes across Australia, and would have to disagree with people who believe they are a bad investment. A benefit of buying a townhouse or unit in a large complex is that there are more comparable sales. From my experience, when researching and purchasing properties in a large complex, I have come across some amazing deals that are below market value or below comparable sales. They even have a high rental yield and are located 20-30 minutes from the Brisbane CBD. Over the long-term, if you do own a property in a large complex, what it means for you in the future when you go to a broker or bank to get the townhouse or unit re-valued, you most certainly will have equity to expand your property portfolio.
As banks look at statistical data and comparable sales, if your property is similar to other properties in the complex that have sold higher, then you will get your property valued at a higher price. You can also move forward a lot quicker due to your property having a lot of comparable sales. I personally have noticed this myself for my own properties, and properties that I have picked up for clients.
The average time a property sells is within 7-8 years. This means that if you are in a bigger complex, these properties will be selling quite often. From my experience, the first property I bought was in a smaller complex (only 8 properties), and there was hardly any comparable sales due to the properties not being sold frequently.
Other benefits of buying in a larger complex is, if you have bought in a metro area there will be a high rental demand, so you can get a tenant in quite quickly. Many people avoid larger complexes because they personally would not want to live in them. However, if you are buying a property for investment purposes you shouldn’t want to live there. The key idea of property investing is to build wealth. It’s not about what you would preferably want to live in. The properties I buy for investments I don’t want to live in them either, but I know they will produce an income, which is the whole point. You must take the emotion out of it, and be analytical when you buy an investment property. Bottom line, if you buy in a metro area you will be able to get tenants, especially if you have the right property manager.
If you stick to the key formula of buying in a metro location, buying below comparable sales, and ensuring the property has a high rental yield, then you should not have an issue with purchasing a property in a large complex. Remember the properties you buy for investment purposes are about the income produced, not what you want to live in.
Disclaimer: This is not intended as legal, financial, or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature, you should seek advice from a qualified and registered legal practitioner or financial or investment adviser.
