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Deciding which type of property is right for you

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Buying your own home is much more than a financial investment. It’s also a lifestyle choice. So, when it comes to finding the right type of property to suit your lifestyle, there are a number of variables to consider.

Do you want a four bedroom home in the suburbs? A townhouse in the inner city? Or an apartment right in the CBD?

To help identify what type of property is right for you, here are a few options to think about.

Buying a home vs building one

It’s the age-old housing debate, is it better to build or buy your own home?

One of the first things you may have to decide is whether you want to build your home from scratch, or buy an existing one.

Buying an established home means you know what you’re getting, and the process is usually faster and easier. On the other hand, building a new place let’s you tailor the home exactly how you want it - from the floor plan to the finishes. Choosing to build can also help you save on stamp duty, since you’re only required to pay stamp duty on the lot of land and not the property itself. For example, a $500,000 land lot in Sydney will mean you have to pay around $17,500 in stamp duty on the land. In comparison, buying an established property in Sydney at the median dwelling price of $1,025,684 will cost you over $41,000 in stamp duty.

In some states, you may be eligible for the First Home Owners Grant (FHOG) if you build from scratch. Most states offer between $10,000 and $30,000 if you’re a first home buyer.

With an established home, you can save yourself the hassle that comes with building and scroll through available properties online until you find the one that suits your requirements. Plus, buying an established home means you can choose your desired location with ease, without being restricted by the size or type of the property - there’s a lot more availability and choice.

Always compare the pros and cons before choosing whether you want to buy or build a home.

Buying ‘off the plan’

Buying ‘off the plan’ essentially means buying a property before it has been been built or is still under construction. Without a physical property to inspect, buyers make their decision based on the buildings plans, artistic renderings, and project developer.

One of the key advantages to buying off the plan is that you agree upon a purchase price before the building is completed. You also generally only need to offer a small deposit. However, this can pose as a downside. You could agree to pay a lot more for a property than it is worth by the time you move in if property prices fall.

Common types of property

There are plenty of different types of homes you can consider including:

Apartments and units

If you’re looking at living close to the CBD, an apartment or unit could be a good option. They’re often more affordable than houses, and generally don’t have as much maintenance involved e.g. mowing lawns, cleaning gutters, and tending to gardens. It can be a good idea to budget for quarterly body corporate fees which pay for the maintenance of the complex.

An apartment or unit complex may also have access to plenty of extra facilities such as a pool, tennis court, gym, and BBQ area.

Townhouses and villas

A townhouse can be the best of both worlds - cheaper than a house, but much more spacious than an apartment. Some townhouses may feature an outdoor terrace or courtyard where you can enjoy alfresco living.

Buying a townhouse can be a great alternative for those who want the privacy of a house, but don’t want to live in an apartment. Townhouses generally don’t have common spaces such as shared hallways or a lobby, so you get more privacy.

Again, as you’ll be on a strata title, you’ll need to pay body corporate fees every quarter, as well as attend regular meetings and committees where important decisions are made about the property.


A duplex is a single building that contains two seperate homes that share a common central wall and one roof. The homes can either exist on one land title and be owned and sold together, or exist on seperate titles and be individually owned and sold.

The residences will have their own front door and amenities, the same as a freestanding house. They also have different mailing address such as 1A Duplex Street and 1B Duplex Street.

For some, a duplex can be key to getting a foot on the property ladder as half of a house comes with half of the price tag. However if you are buying the full duplex, this perk may not apply as the purchase price will likely match that of freestanding homes in the area or more.

Dual occupancies

A dual occupancy is when there are two homes or more built on a single block of land. Or, it can even include building a whole new property next to or behind the existing one.

They can be a good option for people needing to accomodate family members (e.g. elderly relatives), or if you want to rent one of the properties out.

House and land packages

If you’re looking to design your home from start to finish, a house and land package can be a good option. These packages are often available in new suburban/estate developments where land may be more affordable.

House and land packages can also offer ‘turnkey’ deals that come with all the bells and whistles included e.g. driveways, landscaped gardens etc. All the buyer needs to do is turn the door key and the home is ready to go.

Again, choosing to build can also help you save on stamp duty, since you’re only required to pay stamp duty on the lot of land and not the property itself.

While there are upsides to house and land packages, there are a few downsides to keep in mind. The majority of these types of properties are located on the outskirts of the city, so if you’re after CBD life, you might need to consider another type of property. Further, some lot sizes can be small (less than 400 sqm) and there are generally hidden costs involved.

Newly renovated homes

While a newly renovated home might seem like a dream purchase, you need to ensure the property you’re intending on buying is completed to a meticulous standard. In some cases, homeowners cut costs while renovating to try and maximise their return when selling.

When purchasing a newly renovated home, look out for things such as:

  • Poor waterproofing in the wet areas
  • Termite damage
  • Mould concealed e.g. painted over
  • Lack of stormwater drainage or placed in the wrong areas
  • Roof leaks
  • Retaining walls not built to comply with the council’s building codes


Purchasing an older, unique home could be a budget-friendly way to get your foot on the property ladder. While you may get your hands dirty with renovations, you could have the chance to secure a larger block of land or a greater location.

Make sure to get a building and pest inspection to see if there are any glaring structural issues wrong with the property.

Types of property investors

There are generally three different types of property investors:

  • Flippers: Flippers or otherwise known as renovators, buy older residential properties to renovate them and sell them for a profit, usually within a short period of time.
  • Landlords: Buy properties to earn profit through rental income and tax offsets.
  • Commercial: Commercial investors invest in assets that generate income.

What are the three different types of property investment?

There are three main types of property that people look to invest in: vacant land, residential property, and commercial/industrial property.

  • Residential: Most popular type of real estate investment that usually includes homes, apartments, townhouses, and holiday homes. With residential property, you can earn rental income, and save money in tax deductions (if the property is negatively geared). However, finding good tenants can be difficult in some cases.
  • Commercial/industrial: A commercial investment property typically includes offices and factories - buildings that house business operations. Generally, commercial investments could earn a higher return than most residential properties, however they are deemed as a higher-risk in lenders’ eyes. Tenants usually have to maintain the property, saving the investor any maintenance costs.
  • Vacant land: With vacant land, you can leave it alone and still see its value increase as the area around it develops - land doesn’t typically depreciate. However, purchasing vacant land means you won’t generate any rental income making it difficult to support loan repayments. Before purchasing a block of land, consider the location, zoning, shape, access, and history.

If you’ve worked out which type of property is right for you, and are in need of a competitive home loan, contact the loans.com.au team to get the keys to your dream home.

About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

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