Income Resource Club > Property > High vs Low Price Property Strategy
High vs Low Price Property Strategy
High Price Properties
Advantages:
- Less number of properties to deal with;
- Less ongoing soft costs such as bookkeeping, etc;
- Less work looking for them;
- Usually in expensive suburbs that have solid growth performance;
- Better quality tenants.
Disadvantages:
- Luxury items get hit first during bad times;
- High price properties in low price suburbs may have slower growth due to lack of demand;
- Harder to get finance – lower leverage;
- Higher stamp duty and land tax costs.
Low Price Properties
Advantages:
- More stable performance closer to the suburb's median price;
- Lower price properties in established suburbs can handle downturns better;
- Better diversification for rent and resell;
- Lower stamp duty and land tax costs.
Disadvantages:
- More work finding them;
- More ongoing soft costs such as legal and accounting expenses;
- Not as appealing to tenants;
- Lower than usual rent if the property is too run down.
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