As I said earlier, I don’t think it matters as long as it is mainstream property. By that I mean houses or units in suburban areas of a capital city. To begin with I would stay away from holiday accommodation, student accommodation, serviced apartments, commercial and CBD property. Banks usually require a larger deposit for these which mean they don’t think they are as secure as other mainstream property. As a general rule of thumb, if the bank does not think it such a great idea, stay away.
My personal choice would be a one bedroom apartment in a smallish block. Preferably without a lift, pool, gym or onsite manager. It would probably be within 10km from the CBD and less than 5 years old. It would be over 50 square meters and in an area singles and couples want to live. Here’s why.
1 bedroom No damage by children and too small for big parties. One bedroom units are cheaper which means you get a nicer place in a better part of town for the same price as a larger unit.
Unit An apartment or unit has a body corporate which is responsible for all maintenance for the land and external building of the complex. It takes a lot of headaches away for the investor.
No lift, etc. Keeps body corporate fees to a minimum. All these extras are good for tenants but just expensive for investors for little return.
<10km CBD Generally speaking will probably have better capital gains and probably better public transport.
<5 Years old Better depreciation tax benefits and also probably requires less maintenance than an older place.
>50sq mt. Some banks don’t lend on less than 50 square meters.
There are people that say “Land appreciates while buildings depreciate so only buy property with good land content i.e. houses.” While there is some truth in this, it does not mean apartments don’t appreciate, they do. Some houses have the opportunity of “value adding” by subdividing which can make the investor money quickly, but it requires work which is outside the scope of this article being The Lazy Persons Guide.