The House
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Advantages of buying a house
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A house usually appreciates more than an apartment, unless the apartment has special features. The main reason is simple: land. When you own a house, you control the land as well as the house, whereas if you own an apartment in a block you cannot control what can be done with that land – it’s up to all the owners to decide. Another advantage of a house is there are usually fewer restrictions on it than on an apartment, such as having pets and renovating.
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Disadvantages Of Buying A House
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The cost of buying a house in a convenient area for a first home buyer can be high, meaning you risk taking on too big a mortgage. Also, many people prefer the convenience of apartments, whereas houses can be maintenance heavy and require large sums of money to fix structural problems.
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The Apartment
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The most common types of apartment are strata title and company title. Strata title is the more usual type: if you buy a strata title unit you become part of an owners’ corporation, which controls the administration and any funding of common property. You have to pay strata fees.
Company title unit owners are buying shares in a private company; owning a certain number of shares entitles the shareholder to exclusive possession of a particular unit. The shareholders vote to decide company rules governing occupation, including rights to lease, sell or transfer shareholdings. One downside is that some lenders are less willing to lend on this type of apartment.
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Advantages of Buying An Apartment
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A great advantage of buying an apartment is that it’s easy to look after. You don’t need to repaint exterior walls every few years, think about maintenance, look after a lawn or worry about external security. Plus, apartment complexes often have bonus features such as a swimming pool, gym complex or group barbecue areas. You may be able to afford an apartment in just the area you want, whereas owning a house in the same area might be beyond your budget.
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Disadvantages of Buying an Apartment
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Rules are often tougher for apartments than for a house. Buying an Apartment comes with strata fees and you must check that you can afford them. Next, look at body corporate restrictions: ask the real estate agent how much freedom you have to renovate, take down a wall, sand floorboards, add a balcony, etc.
Keep in mind Renovation “I love it. All it needs is a new kitchen, a paint job and floorboards throughout.” This is the thinking of many first home buyers and it is good thinking. However, whether you’re considering a house or an apartment, find out before you buy whether you can get permission. With houses, you need to ensure any major renovation will comply with local council requirements and will not be opposed by neighbours; with apartments all major renovations will need to be cleared by the building’s body corporate.
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