Types of property

Property is not one market. A freestanding house, an apartment, a townhouse and a shop behave differently as places to live and as things to own. The differences come back to the lesson one idea: how much land is in the deal, and who controls it.

Houses

A freestanding house on its own block gives you the most land per dollar and the most control. You own the title outright, you can renovate, extend or rebuild subject to council approval, and no committee votes on your garden. The tradeoffs are cost, because all that land is expensive near cities, and responsibility, because every gutter, fence and hot water system is yours to fix.

Units, apartments and townhouses

Buy a unit and you own your slice of the building plus a share of the common property, the foyers, lifts, driveways and gardens everyone uses. That shared part is managed through a strata scheme, sometimes called a body corporate, which every owner belongs to and funds through regular strata levies. Levies cover building insurance, maintenance and a fund for future repairs, and they can run to thousands of dollars a year, so always check them before falling in love with a listing. Units cost less to buy than houses in the same suburb, but they carry less land, and rules made by the owners committee can cover everything from pets to what you hang on a balcony.

Those levies split into two jobs worth understanding before you buy into a building. The administrative fund pays the regular running costs, the insurance, the cleaning, the power for the common lights, while the sinking fund, sometimes called the capital works fund, saves up for big future jobs like repainting, a new roof or replacing a lift. A well run building keeps its sinking fund healthy, so when the roof needs a large repair the money is already sitting there. A poorly run one lets that fund run dry, and then owners get a special levy, a sudden bill for their share of the cost, which can land as thousands of dollars with only a few weeks notice. So the strata records, not just the weekly levy on the listing, are what tell you whether a unit is a calm place to own or a surprise waiting to arrive.

A common assumption is that a unit is simply the cheaper, safer version of a house, and it is worth untangling. A unit is usually cheaper to buy, but it is not automatically the safer asset. Because a unit carries little land, and land is the part that holds value, unit prices in some areas have grown more slowly than houses, and a suburb that fills up with new apartment towers can end with too many units chasing too few buyers. None of this makes units a mistake, and for many people a well located unit is exactly the right first home. It just means the house versus unit choice is really about land, control and cost, not about one being a lesser copy of the other.

Land, and property you do not live in

• Vacant land: pure location bet with no building to wear out, but it earns no rent, and banks lend against it more cautiously.
• Commercial property: shops, offices and warehouses. Leases run longer and tenants often pay the outgoings, but empty periods can be long and entry prices are high.
• Investment residential property: an ordinary house or unit rented out. The owner collects rent and pays the mortgage, rates and repairs, hoping rent plus growth beats the costs.

As a renter, the type matters too. In a unit you gain a building manager and secure entry but inherit strata rules on top of your lease. In a house you get space and no upstairs neighbours, but heating, cooling and garden care often cost more than the listing suggests.