When you’re looking at property projects, the amount of choices you are faced with can be overwhelming. Not only do you have to decide between locations, different features and property layouts, you also have to decide whether you choose to focus on high rise or low rise properties. High rise developments are certainly eye catching – sometimes they can dominate the landscape – and when they’re located in prestigious locations they can be tempting for any investor. However, there are reasons you should also consider low rise properties as a sensible investment choice.
The “Boutique Factor”
Low rise developments – generally considered to be apartment buildings with eight or less stories – can often appeal to a different type of tenant than a high rise property. The “boutique factor” means that a certain demographic will gravitate towards more exclusive and individual apartments, and they want to be part of a smaller residential community than some of the larger high rise developments can offer. This is particularly true amongst downsizers, retirees, families and older professionals. Low rise developments, such as Ironfish’s exclusive projects in Waitara in Sydney’s Upper North Shore and Ascot Waters along the banks of the Swan River in Perth, are also often located in quieter, leafy suburban streets, close to schools and transport, and away from the noisy hustle and bustle of the city centre. These attributes can make the apartments more appealing to high value tenants.
Lower Ongoing Costs
There is no doubt that tenants are generally attracted to facilities such as pools, gyms and spas, however investors need to be aware of the ongoing body corporate costs associated with the maintenance of these types of amenities. Obviously the bigger the development, the more complex and costly the fees will become, especially as the building ages over time. Low rise developments are less likely to offer these facilities or multiple lifts, meaning your ongoing costs could be more manageable throughout the year.
One important factor in securing good long term tenants is being able to attract them to your property. There can be a scramble for apartments in a brand new or off the plan high rise property project, simply to ensure that the property that investors purchase will be the most attractive and feature-packed offering on the market when it is completed. Once the development is available for occupation, then the scramble for tenants starts and making your property stand out from the others in the building can be a tough ask. In a low rise development, however, there will be less apartments to have to compete with to find tenants. Of course keep in mind that this also applies to when you eventually come to sell the property.
So if you’re looking at brand new or off the plan properties, consider a low rise development as a solid investment choice for your financial future.