Townhouses and Units
One of the most attractive pros in purchasing townhouses and units is the affordable entry point into the market, especially in locations that are beyond your budget if you were to consider a house.
As new houses are getting built further and further away from city centres, it is often the case that townhouses and units are being released in better locations, much closer to the action, but at a much cheaper price than similarly placed houses.
For investors, buying townhouses and units is fast becoming a way to access the high capital growth traditionally associated with houses, while getting strong cash flow from good rental returns.
And whereas with an apartment you own a percentage of the total land of the development, with a unit you own the land that your unit is on, outright.
Townhouses and Units also provide a sense of community that is not always possible with stand-alone houses. Some people may dread the idea of living so close to their neighbours, but for others, this is exactly what they want. This is especially true when it comes to retirees, young professionals and students.
If the unit has its own street frontage & own driveway, it doesn’t need to form a Body Corporate/Owner’s Corporation or be part of a Strata Scheme, but units are usually in a group or complex of 2 or more ,and there is shared or common property such as driveways and gardens.
Therefore, Body Corporate Fees are payable on top of council & water rates, and depending on the size of the development and what shared facilities are part of the complex, they can be costly. Unit complexes generally only have driveways & gardens as common property, whereas apartments can have lifts, a gym, pool, meeting rooms, games rooms & can therefore have much higher fees.
The advantage of buying a unit in a strata scheme is that building insurance, maintenance and upkeep are included in the fee & provided by the body corporate.
Whereas, if you own a house, all maintenance issues are your responsibility. When you weigh up the full cost of any repairs or painting etc. out of your own pocket, compared to Body Corporate fees and the benefit of economy of scale with these costs shared between all owners, it is probably a comparable cost.
And if the unit is for investment purchases, the Body Corporate costs are taken into account when setting the rental price, and are also tax deductible.
CONS are that you have little control over the external appearance, like what colour you can paint your front door. You also have to adhere to body corporate by-laws, which may keep you from hanging your washing on the balcony, owning pets or dictate where you can park your car.