Should You Invest in an Apartment or a House?

by | General, Property Investment Education

Most of us would like to own a regular income stream that pays us weekly with little hassle, right?! RIGHT. That is what residential real estate is fantastic for. But, when it comes to actually achieving passive income from property, should you invest in an apartment or a house? 

Many investors favour one type of property – either apartments or houses, however there are pros and cons so let’s get this out of the way first before we explore if you should invest in an apartment or a house in regard to guaranteed cash flow, growth and therefore future wealth as an investor. 



  • Opportunity for higher capital growth – depending on market conditions 
  • Strategic improvements e.g. renovations, subdivision, development
  • Depreciation of the structure of houses


  • Generally lower rental yield 
  • Higher maintenance costs



  • Generally higher rental yield – good for cashflow 
  • Easier to hold – a strata manager is responsible for the upkeep of the building
  • More affordable options available


  • Lack of land value impedes capital growth 
  • Strata fees 
  • Limited renovation opportunities
  • Some markets are oversupplied 
  • Banks can have stricter lending policies


As you can see, when it comes to which is better – apartments vs houses, the answer is neither. 

While all types of property have good and not-so-good aspects, there are some key decision-making factors that are the same for any property type. 

When growing a portfolio there are two very important factors and one clear decider in distinguishing when it’s better to buy apartments vs houses. 


Your buying power – either the amount you have saved for a deposit or your available equity will give you a clear indication on what your buying power is. This will likely have some influence on the type of property you’ll go for and answer the question of if you should invest in an apartment or a house. 

Second to that is serviceability. Do you have the cash flow required to cover the costs of owning the property? 

It’s a simple question that will need to be asked from the start – can I afford this property? 

Know your numbers. If you can’t afford the deposit, the loan repayments, the taxes you’ll pay, the agent’s fees and any renovations you’ll need to do to ensure good rental income, don’t buy it. Speak to a lender or mortgage broker who can help you work out what you can afford. 


Above all else the key decision on which is better – apartments vs houses, is your proximity to profit. 

This is all about the location baby! 

The words ‘location, location, location’ have long echoed throughout the New Zealand property market but what does it actually mean?

Buying beach or waterside, or within 10kms of the CBD is like striking real estate gold – the problem is though, not many people can afford to do so – especially when it comes to house and land. 

This is when it’s better to buy an apartment over a house. 

It can be hard to make absolute predictions about where to buy property, but there are some golden rules that never fail us. Here are two important factors to remember:

1. Stay close to the action – You don’t want to buy a property that’s more than a 30-minute drive from the CBD or a thriving hub. Proximity to infrastructure, jobs, opportunity and desirable lifestyle is always going to drive property prices in the right direction.

2. Location trumps property type – Say you have $400,000 and that will get you a one-bedroom apartment in a place that attracts money, wealth and a highly liveable lifestyle. Or it will buy you a four-bedroom house out in the bush, hours away from a decent coffee. Location trumps property if you want low vacancy rates, high rent and steady capital growth over time. 


Here’s a deeper look into the location factors listed above and why they are important for property investors to pay attention. 


With the world adding 60,000 new people every day and many wanting to migrate to New Zealand, it’s easy to see how real estate becomes valuable.


Economics is really linked to the employment market. Invest where there are jobs. The economy will always gather pace and then get jolted. Things will happen globally and locally. The major lesson to consider is to keep it simple. Invest near jobs such as big cities which have lots of industry.


Demographics are fascinating because the trends are constantly evolving with time. The higher divorce rate puts pressure on the property market because mum and dad both need separate homes. And then there’s COVID which has seen more people working from home.


Developers and governments spend billions of dollars on infrastructure each year. You will find the growth if you can locate the infrastructure. Be sure the infrastructure is real and forthcoming though, and not fictitious stories or fanciful hope. Check official government reports, in particular, local planning departments.

Yield Variation 

This is a huge factor in the success of many areas. If yields are high, growth usually follows. Yield variation is an instrument to gauge future growth of markets because as the yields expand, growth will follow and compress closer to already expanded yields. The further the yield advances, the more likely that a growth expansion phase will follow. Simply remember this: “growth follows yields.”

Supply and Demand 

Every location has different supply figures and future forecasts relating to supply. Try and not look at citywide figures. Dig deeper suburb by suburb to crack the code.


To succeed as a property investor, there is one fundamental component you need – a plan. You need a plan that leaves no bases uncovered that would potentially cause issues in the future.

Generally, in New Zealand property grows faster than inflation. You can absolutely become a property millionaire very quickly.

You need to understand things like when it’s better to buy an apartment over a house, and also when other real estate strategies such as dual income properties, subdivision or even short-stays could be added into your plan in order to accelerate your wealth creation potential. 


We now know that answering the question of should you invest in an apartment or a house, is less about the property and more about the location and wider portfolio goals. As established, each property type has their pros and cons. 

Whether you prefer houses, apartments or a blended portfolio of properties, the number one thing to remember is that while you’re still in your acquisition phase of investing, you can’t let great opportunities pass you by. 

The market is very competitive right now, and it’s likely it will remain that way for a little while yet. Learning how to act fast is vital for real estate investing – especially if you want to build a million-dollar property portfolio. 

The best way to learn in this space is to follow the guidance of those who have already done it. Our team of knowledgeable coaches are real-life investors themselves, and they frequently share their top strategies and tips for free at our free property investing nights

If you’re ready to take your real estate investing to the next level, register for our free event. 

Register now for the free property investors webinar

By Sue Irons

CEO – Positive Real Estate New Zealand 

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