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A slice or a cake?

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Transcript

A unit or a home? A townhouse or a block of townhouses? You can actually also say, the cake or a slice?

When purchasing investment properties, it’s such a hard decision, and sometimes certain numbers will steer us in a certain direction, but take a step back and let’s just have a look at it from that simple foundation of do you want the cake or a slice? When we’re talking about the slice itself, I’m talking about a piece of the asset, the unit, or one townhouse. There are actually many pros and cons throughout each of them, however, through my investing journey, there have been a couple of things that have come up more than once when it comes to this decision.

A, I’ve noticed that land is the key part that appreciates and not so much the building, the building is what depreciates. Land is always in demand if the area that you’ve picked is right, or in most cases in demand, but when it comes down to the unit or the townhouse, I’ve seen so many scenarios both personally and for customers where they’ve actually just been one slice out of the many slices in the cake. 

A perfect example can actually be where you might have a townhouse in a block of say 20. Now you can have both the good happen to you on a on a steady rate or also the bat, but let’s talk about what a bad may look like. If a townhouse, say for some example, has someone that’s potentially had something going on in their personal life, it could be gambling situations, it could be issues in their personal life or relationships, so many things. 

Let’s just say it’s a stressful situation. If something like that does happen, we could see someone either looking to lease it out at a lower cost or lower rental amount, or actually look at selling this at a lower value. You can imagine the impact that might have though to all these like for like properties, or slices of the cake. 

When I’ve looked at my investment strategy, I’ve come to a new foundation where I say either I’ll purchase the whole block of townhouses or block of units, develop a block or develop a townhouse block, or purchase a home or maybe multiple dwellings on that area. What’s most important to me is I’ve made an actual decision where I do not want a slice anymore in my investments, I want the cake. Consider what that might look like for you, the pros and cons of unit investing, townhouse investing, or investing in a home or a block of those assets. There are many pros and cons, do check it out, but that’s just my thoughts on either the slice or the whole cake. 

That’s it from us here at InvestorKit, the experts in wealth creation, helping you take action.