Are townhouses a good investment?

Wondering whether buying a townhouse is a good investment for you? Our helpful guide provides all the information you need to decide.

If your current apartment is bursting at the seams but your budget doesn’t stretch to a freestanding house, if you’re looking for a reliable rental return, or if you want the ease and convenience of townhome living in a great location in Melbourne, it certainly can be.

Read on to learn more – and to discover how Carlisle Homes is setting new standards for luxury townhouse living.

What is a townhouse in Australia?

A townhouse in Australia is a multi-level, attached or semi-detached residential property that shares one or more walls with neighbouring units. Typically featuring modern designs, townhouses offer a balance between the space of a standalone house and the low-maintenance lifestyle of an apartment. They often come with private outdoor areas and communal amenities, making them a popular choice in urban and suburban settings for those seeking a convenient, community-oriented living experience.

Are townhouses a good investment in Australia?

Depending on your investment goals and lifestyle needs, a townhouse can be a savvy buy. With housing prices across the country on the rise, townhouse packages are an appealing middle-ground solution between standalone houses and apartments.

For first-time buyers on a budget, they can be a great way to break into the country’s tough housing market. And being bigger than an apartment, a townhouse will give you more space to stretch out with more flexible living options.

Townhouses can also be a good option for small families and downsizing retirees seeking a comfortable, reasonably priced home with minimal maintenance required.

They are also appealing to investors. Townhouses in Australia have a history of steady capital appreciation, particularly in sought-after areas. With their contemporary features and relatively limited supply in high-demand areas, it’s safe to predict that the value of townhouses will continue to grow in the long term.

Will a townhouse suit my lifestyle?

Townhouses, such as those offered by Carlisle Homes, boast modern amenities and designs that cater to a contemporary lifestyle. Many townhouse developments include shared recreational facilities, such as gardens, gyms and swimming pools, adding to the overall appeal.

With a focus on low-maintenance living, they can be ideal for busy professionals and those who travel frequently and want a lock-and-leave lifestyle, making them highly desirable for both buyers and renters.

Location, location, location

Where a property is located plays a significant role in its potential as an investment. 

Townhouses are often located in prime areas, offering closer proximity to amenities, such as schools, public transport, shops and business districts, than their freestanding counterparts. This means most things are within walking distance - perfect for young families or retirees that don’t always want to be in the car. 

Townhouses with easy access to conveniences are in constant demand, which is a plus for investors looking for a stable rental yield.

Where a property is located plays a significant role in its potential as an investment. Townhouses are often located in prime areas, offering proximity to amenities, such as schools, public transport, shops and business districts.

Townhouses with easy access to conveniences are in constant demand, which is a plus for investors looking for a stable rental return.

Investment property townhouse vs house

So, is a house or townhouse a better investment? A standalone house generally sits on a bigger block, offers more internal space and privacy, a bigger backyard, and will often appreciate better than a townhouse or apartment. But they typically require a bigger initial investment, putting them out of reach of buyers on a tight budget.

A townhouse comes with a lower price tag, making it accessible to a wider range of investors, particularly first-timers. In addition, townhouses are often located in sought-after estates, with contemporary features, good amenities and proximity to transport.

So, is a house or townhouse a better investment property? A standalone house generally sits on a bigger block, offers more internal space and privacy, has a bigger backyard, and will often appreciate better than a townhouse or apartment. However, it typically requires a bigger initial investment, putting it out of reach of buyers on a tight budget and new to the property market.

A townhouse comes with a cheaper entry point, making it more accessible to a wider range of investors, particularly first-timers. In addition, townhouses are often located in sought-after estates, with contemporary features, good amenities and proximity to transport, making them a great choice for young families and those interested in creating a portfolio of investment properties.  

Diversify your portfolio

If you are an investor who already owns traditional properties, such as a freestanding traditional house or apartment, adding townhouses to the mix can spread risk and potentially enhance returns. This diversification of property types allows you to more comfortably surpass any market fluctuations, guaranteeing you a higher rental yield.

Townhouses can also attract a diverse range of tenants, from young professionals to small families, broadening your market reach. Additionally, townhouses often boast modern home designs and lower maintenance costs, which can result in higher occupancy rates and lower turnover. By including townhouses in your investment portfolio, you can achieve a more resilient and profitable property mix, ensuring steady growth and income.

Rental returns on a townhouse

Whether you’re buying a house, townhouse, or apartment, your rental return will be influenced by several factors, including location, proximity to amenities such as schools, transport, and shops, and the layout, style, and age of your property. So, it’s essential to assess the local rental market dynamics, the median house price in the area, and any capital gains to make an informed decision before you buy. When considering a townhouse as an investment, understanding the potential rental returns and long-term growth is essential. Tools like our Investment Property Calculator can help you estimate these factors and evaluate the overall financial feasibility.  

Do you own the land in a townhouse?

Yes, when you purchase a townhouse in Australia, you typically own both the dwelling and the land it sits on. This is in contrast to apartments, where you own only the unit. 

Townhouse ownership includes the land title, meaning you have legal rights over the property and the land value. This offers property investors more control over renovations and modifications compared to other property types.

Start your investment property journey with Carlisle Homes

With Carlisle Homes, you can choose from a range of stylish and functional townhouse designs, each built to the highest standards. 

Our townhouses are strategically located in thriving communities within walking distance to local conveniences, ensuring strong rental demand and potential for capital growth. 

Invest with confidence and let Carlisle Homes guide you to a successful property investment.