If you've been furiously saving and are ready to start looking for your first home or you're desperate to move and can't decide between a house vs an apartment, there are so many things to consider. From lending matters to maintenance costs to capital growth, we take a look at what you should think about when considering buying a house or an apartment.
What are the ongoing property costs?
Budget is one of the biggest factors when it comes to purchasing a property and it's important to think not only about the property acquisition costs but the ongoing costs. In general, apartments are usually a more affordable option, with lower property acquisition costs; however, in some cases, the ongoing costs can be more than a house.
Here are some of the costs associated with each type of property;
Property acquisition costs
* Lender fees and charges may be incorporated into your loan, depending on the lender you have chosen.
What ongoing costs will you have?
Besides your home loan, there are a number of other property costs that you will need to consider. With many apartments, you will need to pay a maintenance fee or ground rent for the building, which includes maintaining the hallways, gardens and shared spaces. With a house, you will rarely have to pay this, but in some cases, you may need to pay upkeep of the grounds around your housing development or shared facilities.
Ongoing costs
Make sure you also budget for extra property costs too and see if there are any projects that you will need to save for in your property, like new electrics or decorating costs.
What makes the most long-term sense?
Buying a house or an apartment is a big commitment, so it's important to consider what you will be looking for in a home in a few years time too. If you're getting older and struggle with mobility, a house with a lot of flights of stairs might be a poor choice and an apartment with a lift could be more convenient. If you are planning on starting a family, it might be worth considering a house so you have enough room and space for them to play outdoors.
Covid and the property market
None of us could have planned a global lockdown, but it's been especially tough for those who are living in apartments with no outdoor space of their own. If facilities like pools, gyms and parks have to close again, it is worth thinking about whether you'd prefer to be in an apartment or a house. It's also wise to look at local property values and see where has increased and where hasn't. Look for an area that is on the up, and a house or apartment that has plenty of potential for capital appreciation as the market stabilises.
Prepare a property research checklist
When looking for your new home or investment property, it pays to have a clear head. Utilising a property checklist whereby you assess each property element in comparison to each property you consider. We have developed a Property Buyers Guide which includes a ‘Property Research Checklist’ to help you choose the right property for your needs and budget.
Getting a home loan approval
Securing a home loan approval comes down to a number of factors, from your credit history to the property's postcode to your normal living costs. When it comes to buying a house vs an apartment, there are also differences when it comes to the mortgage application process. Another consideration for buying an apartment is the lending issues that can occur in oversupply areas. This is an area or postcode where there is an oversupply of apartments so lenders will not offer you a loan as the property value could decrease.
Before you start your property search, have a chat with the Mint Equity team to find out your borrowing capacity and any lender restrictions for the locations you’re considering.