There are many types of properties and some are better options for investment purposes. In this article we will focus on sectional title townhouses & apartments and why they may be on the top of the list.
1. Other owners in the complex are looking out for your interests
Sectional title complexes are governed by a body corporate, which is run by the trustee members voted in by the owners. Owners are usually very involved in the management of the body corporate which is very advantageous to the investor – they make sure the complex is well run and that maintenance takes place. They will also ensure that the body corporate keeps the levies down / keep increases low.
2. The Body Corporate
The Body Corporate is responsible for general maintenance and management of the complex. The Body Corporate can impose fines on anyone not abiding by the rules and regulations which ensures order in the complex.
It can easily be established what the current market-related prices are, as well as the expected rental income. This reduces the risk of the investment as it allows the investor to project future income and equity growth.
4. Rental returns
Rental returns may be higher for townhouses and apartments. The barrier to entry for first-time buyers can be quite high due to rising house prices. This leads to an increase in rental demand, especially in the entry-level price ranges. Higher demand and a shortage of properties leads to higher rental prices and thus a higher return on investment.
Other advantages to an investor deciding to purchase in a sectional title complex:
– Security is good
– Gardens and communal areas are well taken care of
– Lower entry price
– Lower prices mean you can purchase more units and in this way diversify your portfolio
Lew Geffen Sotheby’s International Realty