Many people choses to buy a house than a flat, in this article, we will concentrate on the good and bad side of buying a flat. There are split opinions about the issue as to which makes the wise investment, buying a house or a flat.
Some people realize (wrongly) that flats are wasted investment because you have to give back the flat at the end of lease. Another side will say flats are a good investment because of the higher yields and lower purchase cost and low on maintenance as the freeholder takes the responsibility to arrange external works for them.
Some of the Overlooked Advantages:
· Lower purchase price compared to house.
· There is a wide range of choices where you will find flat costs as two thirds of a house price.
· Higher cash on cash returns and yields.
· Cost of maintenance is shared and freeholder will organize the work.
· Lesser cost means a chance to buy a bigger space for the family.
· You can get discounts by buying in bulk.
· Demand hikes can soar flat prices.
Disadvantages of Flats as an Investment:
· Some has high grounds and charge service charges.
· Harder to qualify for financing
· Limited living spaces
· No freedom to add value without asking the permission of the freeholder.
· Less unique factor if the flat is located in a large block.
· Higher turnover of tenants.
· Risks of hidden maintenance costs.
· Ground rents can increase over time.
· Not all flats could be mortgaged.
Not’s not all, there are other factors that you might want to see before investing in a flat. It could depend on your needs and your cash on hand. What others do is they ask a lot from people who had experiences buying a house and flat. So, ask around , from a friend or a family member. Then later you can ask your agent, after all they have handled a lot of clients who’d prefer flat or a house.