Is it better to buy a house, a townhouse, or an apartment for investment?

There’s no single correct answer, and it’s worth being sceptical of anyone who gives you one. Houses, townhouses and apartments differ on land content, ongoing costs, maintenance responsibility, tenant demand and depreciation profile — and which set of trade-offs suits you depends on your budget, your target tenant, and how hands-on you want to be. This guide compares the factors side by side. It doesn’t pick a winner.

How do houses, townhouses and apartments compare on the factors that matter?

Factor	House	Townhouse	Apartment
Land component	Highest — a standalone house typically sits on its own full block	Lower — a smaller, sometimes shared, block per dwelling	Lowest — land is shared across every unit in the building
Strata / body corporate	Usually none, unless on a strata-titled block	Common — smaller schemes, often lower-rise	Almost always — larger schemes, often with lifts, pools or gyms
Maintenance responsibility	Owner handles the whole property: roof, exterior, garden	Split — owner handles the interior and any private yard; body corporate handles common property	Split — owner handles the interior; body corporate handles almost everything else
Typical tenant demand driver	Families wanting space, a yard, and school catchments	Smaller households wanting less upkeep than a house, more space than a unit	Singles, couples and downsizers wanting proximity to transport, work or lifestyle precincts
Depreciation profile	Division 43 capital works only, on the building — land itself is never depreciable	Division 43 on the building, plus a body-corporate-apportioned share of any common-property capital works	Same as townhouse — Division 43 on the unit’s construction cost, plus an apportioned share of common property, often larger given lifts and shared facilities

None of these rows is a ranking. A higher land component isn’t automatically an advantage, and a lower one isn’t automatically a disadvantage — each is a different cost and risk profile that suits different investors and different budgets.

What does ‘land component’ actually mean for an investor?

Land and buildings behave differently over time: buildings age and depreciate, while land itself does not. A property’s land component is the share of its total value attributable to the land it sits on rather than the structure on it. A standalone house on its own block generally has the highest land component of the three; a unit in a large apartment building generally has the lowest, because the land under the whole building is divided among every owner. This is a structural difference, not a growth forecast for any of the three — how any specific property performs still depends on its location, condition and the market it sits in.

How do body corporate and strata costs differ?

Any property on a strata or community title — most townhouses and virtually all apartments — pays body corporate (owners corporation) fees to maintain common property: building insurance, common-area cleaning, and a sinking fund for future capital works like roof replacement or repainting. Standalone houses on a normal title don’t carry this cost at all, and the owner instead carries the whole maintenance bill directly.

No state fair trading body or strata management industry body publishes a typical or average body corporate/strata levy range — strata costs are scheme-specific, set from each scheme’s own budget, and vary widely by building age, size, amenities and sinking-fund balance. Check the specific scheme’s financial statements for the actual levy that applies.

Body corporate fees are set scheme by scheme, based on the building’s size, amenities and sinking fund needs — a small townhouse complex with no lift or pool generally costs less to run than a high-rise with both. There’s no single “typical” figure that applies across the market, and any figure quoted for a specific property should be checked against that scheme’s own financial statements, not a rule of thumb.

How does depreciation differ between the three?

The building itself — regardless of whether it’s a house, townhouse or apartment — can generally claim a Division 43 capital works deduction. As at July 2026, that rate is 2.5% per year over 40 years for residential construction that started after 16 September 1987, under ATO guidance.

Where a property sits within a strata scheme, an additional layer applies: a share of the building’s common-property capital works — lifts, shared roofing, driveways — can also be depreciated, apportioned across owners by lot entitlement. A standalone house has no common property to apportion, so this second layer simply doesn’t exist for it.

One restriction applies equally regardless of property type: since 7:30pm AEST on 9 May 2017, a stricter rule (Division 40, s40-27 of the Income Tax Assessment Act 1997) has limited plant and equipment deductions — ovens, carpets, air conditioners — on second-hand depreciating assets in residential property, for most individual owners. Buying an established house, townhouse or apartment carries the same restriction; it doesn’t favour one property type over another.

Depreciation entitlements depend on your own circumstances and the specific property. Tax outcomes depend on your circumstances — speak with a registered tax agent before acting.

What should I actually weigh up before choosing?

• Budget and entry cost. Apartments and townhouses typically have a lower purchase price than a comparable house in the same suburb, because they carry less land.
• How hands-on you want to be. A house puts every maintenance decision and cost in your hands. Strata living hands the big structural decisions to a body corporate you don’t fully control.
• Your target tenant. Match the property’s layout to who’s likely to rent it — families lean toward houses, sole occupants and couples toward units, and townhouses often sit in between.
• Ongoing cost certainty. Body corporate levies are a known, budgeted cost. House maintenance is less predictable — a bill can arrive with no warning.
• Diversification of your total exposure. Buying an apartment can free up capital for a second property or another asset class, rather than concentrating everything in one house.

ASIC’s Moneysmart service has a broader independent rundown of what to weigh up before buying any investment property, regardless of type.

There’s no property type that suits every investor, and no formula that removes the judgement call. Working through the factors above against your own budget, goals and risk tolerance — ideally with a licensed buyer’s agent or financial adviser — gets you further than trying to pick the “best” type in the abstract. Our guide to property investment in Australia covers the broader mechanics, costs and risks that apply regardless of which type you choose.