Different Property Types Explained
What do all the different property types mean? In today’s episode we explain the difference between houses, units, townhouses etc.
When searching for property, often you’ll come across the different property types being house, apartment and unit, townhouse, villa, land, acreage and rural, blocks of unit and retirement living. So what do all of these different property types mean? That’s what we’re going to go through in today’s episode.
Hey, I’m Ryan from onproperty.com.au, helping you find positive cash flow property. In today’s episode, as I said, we’re going to look at the different property types. The easiest way to do this is to simply go to realestate.com.au and go ahead and search by property types.
The most straightforward one is going to be the house. So, this is generally a freestanding building on its own block of land. I’m not going to go into all the different types of land titles or the different developments, types and things like that, different zoning for areas because that varies from council to council. But, if we go ahead and have a search for houses, we can see a few detached houses here, which means the house is completely freestanding.
But then, we also have some semi-detached houses or houses that are attached to each other. Here, we have one in Erskineville in Sydney in New South Wales that is a terrace sort of house. There is joining walls on both sides of these houses.
However, we’ll see when we go into townhouses and villas that these differ because they don’t have common land. So they share common walls and, obviously, you need to work with your neighbour if you’re doing anything in the common wall. But they don’t have common areas or strata or anything like that that they need to pay for. They just have their own house, their own block of land, etc. If you keep going through, we’ll see a lot of detached houses.
Let’s go back and look at the next one, which is going to be apartments and units. These are very different from houses. Generally, this means a building with multiple units within it. Generally, we can see a big unit at the start here or we can see smaller units as well. These generally have common internal areas, common external areas. Generally, it’s one building with lots of different units in it.
This one here in Croydon, New South Wales, is a prime example. You’ve got the entrance and it looks like there’s 4 units at the front there. There may even be more at the back. They would all share the front garden. With units, something to consider is strata and body corporate fees. Everyone who owns the units, they all come together as a committee.
They form a body corporate and they make decisions on how to spend money. There’s extra fees that go into a unit that don’t necessarily go into a house because you’ve got to pay these quarterly strata fees that go towards the maintaining of the common areas or if they want to do renovations to the building or things like that.
Next, let’s have a look at townhouses. Townhouses and villas are quite similar. Townhouses and villas are generally properties that are attached to other properties. But, they tend to be in complexes as well.
It’s kind of like a mixture of houses and units. We can see a freestanding townhouse here. We can see a freestanding one here as well. But, what it means is that you’ve got a property, whether it be fully detached or semi-detached or attached to other properties, but you are in a common complex or a common block of land. So you share that block of land with other people, kind of like a unit.
It’s like the house version of a unit. Again, you’re going to have strata and body corporate fees with this to manage the common areas and things like that. Often, the externals of the property are set by the body corporate in terms of colouring and things like that. But, you do have more room. It tends to be a bigger property.
The difference between a townhouse and a villa is quite small. Townhouses tend to be 2-storey properties whereas a villa is always going to be a 1-storey property. If we go ahead and have a look at the villas here, we can see that they’re all one-storey. But, villas are similar to townhouses in that they are a part of an overall complex. In which case, you need to pay those strata and body corporate fees to maintain the common areas and things like that.
A villa is basically a single-level townhouse and a townhouse is basically a 2-storey villa. They’re very similar to each other.
Land is pretty self-explanatory. If we go ahead and search on land, then we will see that it’s just basically different blocks of land that don’t have dwellings on them yet. We can see this is a great aerial picture of this block of land. We can see that there is no building on this land yet. So, this land needs a building on it. So when you’re searching for land by itself, you can definitely use the land category.
We’ll then go ahead and have a look at acreage. Acreage, I believe generally has a property on it, but it’s going to be quite a large property. We can see that these are houses here. But, we can see that it’s a house with a huge block of land. So, this one that we’re looking at right now is 15.5 acres. So if you’re looking for not just a house on a block of land, but you’re looking for a house and a significantly large portion of land, then you’ll probably going to want to look at acreage.
We can see some beautiful houses here that are on acreages. Some people just love having that land. Personally, it’s not really my cup of tea because it’s just so much to maintain. But, if you want acreage, then all the better for it. They’re really beautiful.
And then, rural, let’s go ahead and have a look at that one. I haven’t done a lot of search in the rural space. Generally, these are massive rural properties. Generally, with a business attached to it as well. It might be that it’s got a farm attached to it or it might have cattle or things like that. I think it’s best if we go ahead and have a look at one. These are generally going to be quite expensive from what I have looked at.
We can see that this rural land has cropping/grazing suitable for large scale drip/pivot/feedlot. That doesn’t make much sense to me because I don’t know a whole lot about farming. But, we can see it’s over 2,000 acres. We can see it’s got rivers, it’s got flood-free red loams, there’s all this sort of stuff. If you’re looking for rural stuff where you want to have cows or you want to run a rural business, then that’s what you would look for there.
I hope that that gives you an overview of the different property types. These are generally used just for ease of use on realestate.com.au so you can find what you’re looking for more easily. Something that I haven’t looked at yet, actually, is blocks of units. So, let’s go ahead and have a look at that because I really like this, especially when it comes to positive cash flow. It’s really easy to find positive cash flow in blocks of units.
Blocks of units are – we talked about units and flats before where you have one unit in a big building. Blocks of units are you buy the entire building. We can see one here. Rather than just buying one unit within it, you buy the entire block. There’s no strata fees or anything like that because you own everything and you decide where all of the money goes. That’s what blocks of units are.
They do still exist. They are rarer. You find them more in regional areas and things like that. This just means they haven’t been strata-titled. When we look at flats and units, there’s a process called strata-titling where each person has their title on the shared land. These blocks of units generally haven’t been strata-titled. They’re just under that one title – quite similar to a house. But, there’s lots of dwellings in there. That is blocks of units.
What was the last one on there? Retirement living. Retirement living can be a mixture of things. Generally, it is only for over 55. Depending on the area, there are ways to build properties that are smaller than would otherwise be allowed and they market them as over 55. For some reason, they allow people over 55 to live in smaller properties. Sometimes, these properties have care attached to them.
So, you might have a nurse that goes around to your building or you might have like a nursing home down the road that you could move into eventually. But, there’s also a bunch of them that don’t have any of that. It’s just separate living. It’s just a way to market these properties. Over 55 is generally, it’s harder lending for. You’re going to need a bigger deposit. But, with retirement living, if you’re over 55 and looking for that, you can get really nice surroundings and things like that.
I hope that that kind of covers the different property types that you’re looking for. I like houses and I love blocks of units. With everything, there’s always different lending criteria. There’s different things that you need to look at. None of these is perfect. I love houses because there’s no strata fees.
You decide what you’re going to do. You decide what you decide to spend your money on. But, then, some people love the apartments and units because they’re cheaper than houses and they don’t mind that they have to pay the strata fees and work with a committee to get stuff done, same with townhouses and villas and things like that. I hope that this explains the difference in property types.
If you’re looking for positive cash flow property, then I would probably just start with blocks of units just so you can find some and you can see that there’s so many positive cash flow blocks of units out there or also look for houses in specific areas as well. Because often, with apartments and units, the strata and the body corporate fees strip away the positive cash flow. The same with townhouses and villas, actually, as well. So, blocks of units and houses are good to look at when it comes to positive cash flow.
Or, you can just head over to my website at onproperty.com.au and I’ll help you find positive cash flow properties. Inside the members area at On Property, I find and list a new positive cash property every single day. So it’s a property with a high rental rental yield that’s very likely to be positive cash flow. Every single day, there’s a new one available to members. I also have tools in there to help you analyze positive cash flow.
I’ve got courses as well. I show you exactly how I go about finding positive cash flow properties on the internet. I show you exactly how to do it so you can go out and do it like me and find as many positive cash flow properties as you want. You get complete access to all of that. Just head over to onproperty.com.au and click the “Get Started” button to join today.
That’s it for me, guys, until next time, stay positive.