Understanding Different Property Types
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Why Property Type Matters to Your Long-Term Investment Strategy
Property is an excellent investment vehicle in Australia, however, not all properties perform the same. The property type you select influences your cash flow, long-term capital growth, borrowing capacity and the speed at which you can scale your portfolio.
Many first time investors focus on the property they personally like, rather than the property that best supports their financial strategy.
At AllianceCorp, our Property Wealth Planners help you understand how different property types behave over time as part of your free discovery session. We use these tailored insights to put together your personalised investment plan.
Want to understand how our property wealth planners at Alliance Corp evaluate property types?
Here we’ll take you through an overview:
Explained: Our Three Core Property Types for Investing
At AllianceCorp, we group qualified property into three key classifiers based on how they influence performance in an investment property portfolio:
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1. Physical Type
The way properties are built and zoned hold a clear influence on the value you get out of them, as well as what liabilities or limitations they may also bring with them.
Established Properties (over 5 years old)
Established properties are often on larger land parcels and typically located in well-developed suburbs. They can deliver strong land value but come with higher upfront costs including stamp duty, maintenance and potential renovation work.
New House and Land
A popular choice for strategic investors due to lower establishment costs, strong depreciation benefits and minimal upfront maintenance. These properties can allow you to enter the market sooner and potentially acquire more than one property with the same amount of initial capital.
New Off-the-Plan
Can offer buyer incentives and depreciation benefits, though investors must be mindful of valuation changes between purchase and completion.
Townhouses
A middle ground between houses and apartments. They offer some land component, lower maintenance and can be appealing to both families and downsizers.
Apartments
More affordable entry price but limited land ownership and higher strata fees often result in slower long-term growth. High density apartments will also typically have fewer loan options, and often require private lenders.
2. Performance Type
Another lens for looking at property is by how it performs as an asset in your portfolio.
High Growth
These properties offer strong long-term capital growth potential, often driven by land value, population increases and infrastructure investment. As an asset, high growth properties build wealth over time but may offer lower short-term rental yields.
High Yield
These properties deliver stronger rental income relative to their purchase price. High yield properties help improve cash flow and borrowing capacity but may experience slower long-term capital growth.
Balanced
A blend of solid growth potential and reasonable yield. Balanced property assets can help investors expand their portfolio sustainably while managing holding costs. We make the recommendation to most investors to have a balanced portfolio.
3. Low or High Establishment Cost Type
The upfront cost of entering a market varies significantly between property types. Understanding these differences helps you stretch your capital further.
Low Establishment Cost Types
New builds such as new house and land packages typically require lower upfront costs. They also allow you toreduce stamp duty because duty is often paid only on the land component. Lower costs mean your initial capital can go further, sometimes allowing you to secure two properties instead of one.
High Establishment Cost Types
Established properties often require higher upfront investment due to stamp duty on the full purchase price, maintenance and potential renovation work. While established properties may come with stronger land value, the higher setup cost can reduce your immediate purchasing power and slow your ability to build your portfolio at pace.
With our analysis of property types by establishment cost, you get a clear view of where your money works hardest and where it can get trapped.
Learn more about how AllianceCorp can help you get started or level up your strategy, with comprehensive services to support you through your journey.
Read the Complete Guide on Property Types
Download your copy below and continue building your investment knowledge with confidence.
AllianceCorp has created a detailed FREE resource to help you take the next step.
This is the full breakdown of every major category and how each can shape your long-term results.
GUIDE TO UNDERSTANDING DIFFERENT PROPERTY TYPES
Why Investors Trust AllianceCorp With Their Portfolio Strategy
Understanding real estate by these three categorisations is only part of the picture.
It’s paramount that you’re able to understand what property types will give you the most benefit in developing your portfolio right now. You must be able to identify these property types in the market, and at locations and prices you can enter.
It’s also not enough to just get one or two investment properties to get ahead. Developing a balanced portfolio of many property types is what helps many Australians get ahead.
We help you identify which property types support your:
- Financial position
- Investment timeline
- Risk tolerance
- Long-term wealth goals
- Cash flow requirements
As property investment advisors, we actively scour the nation to get our clients into a market ahead of a boom with property types vetted for performance. So you can be rest assured that every property you purchase plays a deliberate role in your journey. If you want personalised guidance on how to apply these insights to your own investment journey, we are here to help.