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On the other hand, older dwellings harbour many health risks such as asbestos, lead based paints, banned chemicals, formaldehyde, earth leakages, pest infestations, dodgy DIY jobs and the absence of tempering valves and smoke detectors.
In addition, you could be up for costly maintenance issues with some of the more common problems including structural soundness, faulty wiring and electrical, plumbing replacements, kitchen and bathroom renovations, hot water systems and floor coverings.
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There are a few reasons why houses tend to be a wiser choice for investors. Houses have a greater growth potential than units, apartments and villas because of the land attached to the house. There is also more potential to increase the homes value by renovating and extending, and your choices are not limited by Body Corporate approvals.
With units, apartments and villas, applicable Body Corporate rates are payable and this can be costly with these types of dwellings now offering more lifestyle facilities such as gyms and pools.
Graeme Joyce, president of the Real Estate Institute of Australia (REIA) says he is a strong believer in land value because land appreciates over time while buildings depreciate. Mr Joyce said. “If you take a high rise apartment, land comprises only 10-15 per cent of value whereas with a home in the suburbs around 35-40 per cent of the value comes from the land component.”
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