Investing in a Townhouse

Should I add a townhouse to my portfolio?

As the cost of land skyrockets and the great Australian dream of a big backyard becomes unreachable for many, a townhouse offers a more affordable alternative. Townhouses have widespread appeal; the additional indoor and outdoor space is highly desirable for families whilst the lower maintenance makes them ideal for downsizers.

Busy professionals are also attracted to the “lock up and leave” lifestyle a townhouse offers, as well as the open space apartments can’t offer.

Townhouses are often located closer to the CBD or close to convenient transport nodes and retail hubs making them a more convenient lifestyle choice.

If your current property investments are mostly houses and apartments, a benefit to investing in a townhouse is to diversify your portfolio. A diverse investment portfolio is important to building a sustainable portfolio over the long term.

What are the advantages of investing in a townhouse?

Whilst typically smaller and with less outdoor space, townhouses are becoming more and more popular due to their open-style living and proximity to infrastructure and cities. Some of the advantages of investing in a townhouse are:

Affordability – With typically smaller blocks due to shared spaces and reduced outdoor areas, townhouses are a more cost effective investment opportunity. This means they can be a good starting point for first time investors. They are also appealing to experienced investors looking for another way to diversify their portfolio.
Low maintenance – With smaller outdoor space and the potential for a property manager to take care of shared spaces this is likely to be a less hands on investment.
Depreciation claims – Not only can you claim on the structure and fixed assets but you can also claim depreciation on shared property items such as driveways and security cameras.
Broad rental potential – Due to the typically modern, open plan design of a townhouse as well as the limited maintenance requirements – this type of investment is likely to attract a higher number of quality tenants. This can in-turn potentially drive up your rental returns.

Performance

Strong rental yields & capital growth strengthening with increasing demand.

Growth Drivers

Proximity to shopping centres, public transport hubs, hospitals, universities, parks, lakes & beaches.

Location

Typically within 5-15km of a highly built-up area, CBD or major employment hub.

Tenants

Young families, single parent families & married couples.

How can you be confident you’re investing in the right townhouse?

Many Australians may be keen to buy a townhouse investment property because of the growth location, government incentives on offer, potential tax advantages or simply to enjoy the cutting-edge design that suits a contemporary lifestyle and will appeal to a high-calibre tenant. But all townhouses aren’t created equal. How can you be sure of the delivery and quality of the end product?

We share the same concerns. That’s why we have a number of criteria regarding how we select our properties which includes thoroughly reviewing every property we recommend, and only partnering with industry-leading developers.

Quality

Developers who share our passion for delivering townhouses of an exceptional quality.
Legacy

A proven track record of delivering quality townhouses in the right locations.
Value

An affordable price point that represents value for investors.

What we really appreciated most about Ironfish was that all the homework had been done for us and we simply had to assess our options. There was no pushing or hard sell. Our best interests were as high a priority as theirs were.

— Candice Lowe, Registered Surveyor

Why would we turn down a townhouse development?

Our brand reputation means we can as selective as we want when it comes to choosing which developers we partner with and what townhouses we recommend to our investors. In reviewing a development, we consider many factors including location, convenience, comparable pricing, size, floorplans and contract terms. And of course, the developer: what’s their track record, which builder are they using, and what’s their strategy to ensure the development gets off the ground successfully?

Typically, we reject the majority of the townhouse developments we analyse.

Learn more about how we select properties

See how our customers are building their portfolios with us