Are Townhouses a Good Investment?

June 6, 2022
Are Townhouses a Good Investment?

The question of, are townhouses a good investment can go a long way in a market that is currently bursting with new opportunities to invest in a gold mine. 

Want comprehensive guidance? Dive deep into our expert take on insurance for a townhouse to ensure you’re fully covered.

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Why buy a townhouse?

In recent years, townhouses have become the talk of the town. The idea of buying a townhouse is more popular than ever. So if the question, are townhouses a good investment crosses your mind, it may be worth it to do some exploring. 

Downsizers and budding investors tend to turn away from multi-storey towers as well as freestanding homes, which leaves townhouses in a tough place. Investing in townhouses has many benefits that oftentimes go ignored.

More and more townhouses are popping up on the scene, naturally increasing the prices when compared to freestanding properties. This means that for those who want to invest in a way that allows them to compete on the market at an affordable price, a townhouse in Australia is a smart choice. 

While a townhouse may come as an easier investment, it still requires a certain level of knowledge and drive to accomplish your goals in such a competitive market. There needs to be calculated steps taken before diving into an endeavour such as this one.

Understanding the value being a townhouse, the different benefits you can get with strata, the additional security benefits of investing in a townhouse, and the flexibility it allows you will create a smooth-sailing investment process. 

Are townhouses worth an investment?

red bicycle parked beside black metal gate in front house

If you have to ask yourself ‘are townhouses a good investment,’ it’ll be good to know that most are built with affordability in mind and to attract investors. The minimal land it sits on is an added bonus.

From an investment perspective, it is worth it to take a meticulous look at any possible structural issues that can negatively affect your resale price. On the bright side, townhouses are designed to make sure use of the property. 

If you are just starting out on the property market and ask yourself ‘are townhouses a good investment,’ you are already on the right track. Investing in a townhouse is a relatively affordable way to get into the property market without having to make too much sacrifice. 

You may be wondering, do townhouses appreciate or do townhouses have good resale value? Because they are oftentimes located within the inner city, they are fairly easy to sell. Don’t expect the exponential capital growth that would see with a freestanding property in the inner city as well.

There is high demand for townhouses and it is forecasted to continue to be this way. Existing and new townhouse owners will likely expect greater capital growth in the years to come. 

Strata benefits

A common question asked when it comes to this standard of living is ‘does a townhouse have strata?’ If they are two or more properties within a certain development, townhouses can be sold with a strata title.  

Townhouse strata involve agreeing to purchase a portion of the property and contributing the necessary townhouse strata fees to maintain the development. It is important to take into consideration the townhouse body corporate fees that come along with investing in townhouses.    

Body corporate fees tend to increase as the facilities on the property increase. Strata fees for a townhouse are important in maintenance as well as resident satisfaction. 

The benefits of being in a strata corporation involve more interaction with neighbours and less individualised maintenance of the property. Not only do townhouses have strata, but the strata fees are significantly lower than multi-storey tower developments. 

For example, the strata fees Victoria has in place are only between 0.3% and 0.7% of the property’s actual value. Are townhouses a good investment in Australia? That’s a resounding: yes! 

There is less work when it comes to maintenance and less to worry about when living in a townhouse.   

Security benefits

There are also included security benefits when it comes to living in a townhouse stratum. When it comes to those with more than two properties in the development, there are increased security measures.

This not only decreases the risk of outside crime, but also ensures more satisfied residents. The strata corporation is responsible for maintaining the security of the development, especially when it comes to the  insurance policy

Whatever the cost of having security on your property is, it will most likely come in the form of strata fees. Whether you want to create security measures or not, many people turn to townhouses due to the heightened security.

To compete in the market, it is recommended to stay up to date with ongoing trends. The question of, are townhouses a good investment can only be answered if you are willing to put some energy into your investment.    

white concrete building during daytime

Find what works for you

Even if you are wary, remember that there are many types of strata-type townhouses that are available to invest in. Depending on your end goal, investing in certain types of townhouses can be more beneficial than what you initially intended. 

If you are more concerned with what changes you can make versus the actual property, your priorities will most likely lead elsewhere compared to someone who is just hoping to invest in the most expensive building.

Knowing your financial limits will allow you a clear view of what is feasible when investing in townhouses. Keep in mind that the biggest benefit of a townhouse to most people is the location. 

Looking for your dream townhouse? 

We can also help you out in that department. Browse our search page to cheque out some amazing listings available right now. But don’t just stop there, download our app to get the full Soho experience. Just remember to shortlist or swipe left on our listings so we can send you others that better match what you’re looking for

Soho is your expert team in Australian real estate, offering an innovative platform for effortless property searches. With deep insights into buying, renting, and market trends, we guide you to make informed decisions, whether it's your first home or exploring new suburbs.
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