Comprehensive comparison of unit vs house investment in Willoughby, including yields, growth, tenant types, costs, and suitability for different investor profiles.
Units offer higher yields (4.0-4.5% vs 3.0-3.2%), lower entry cost ($850K vs $1.95M), and passive management (body corporate handles maintenance). Houses deliver superior capital growth (6.5% vs 5.8% annually), land value appreciation, and control over renovations. Units suit cashflow-focused investors and first-time buyers; houses suit wealth-building and equity-release strategies.
A $850K unit with $680K loan generates $33,800 annual rent and $31,840 loss (negative gearing). After 45% tax refund ($14,328), out-of-pocket cost is $17,512/year. A $1.95M house with $1.56M loan generates $62,400 rent and $54,268 loss. After tax refund ($24,421), out-of-pocket is $29,847/year. However, houses gain $126,750 value annually (6.5% growth) vs units $49,300 (5.8% growth) - a $77K annual wealth-building advantage.
| Metric | Units | Houses | Advantage |
|---|---|---|---|
| Median Price | $850K | $1.95M | Units (Lower entry) |
| Gross Yield | 4.1% | 3.2% | Units (+0.9%) |
| 10-Year CAGR | 5.8% | 6.5% | Houses (+0.7%) |
| Annual Value Gain | $49,300 | $126,750 | Houses (+$77K) |
| Annual Cashflow (post-tax) | -$17,512 | -$29,847 | Units (+$12K) |
| Vacancy Rate | 2.1% | 1.6% | Houses (Lower) |
| Avg Tenancy Duration | 2.1 years | 2.8 years | Houses (Stable) |
| Maintenance Costs | Lower | Higher | Units (Body corp) |
Units attract young professionals (singles, couples) aged 25-38, earning $80K-$160K, seeking lifestyle proximity to Chatswood/North Sydney. Tenancy averages 2.1 years with moderate turnover. Houses attract families earning $140K-$220K, prioritizing school catchments and space. Tenancy averages 2.8 years with 94% renewal rates. Family tenants cause less wear-and-tear and pay premium rents but demand higher maintenance standards (garden upkeep, appliance quality).
Units: strata fees $5,000-$8,000/year (maintenance, insurance, sinking fund included), council rates $1,500-$2,000, minimal garden/exterior costs. Total: $6,500-$10,000/year + landlord insurance. Houses: council rates $2,000-$2,800, garden maintenance $2,000-$3,500, exterior repairs (gutters, painting) $1,500-$3,000. Total: $5,500-$9,300/year + landlord insurance. Units appear higher but include services houses pay separately.
Houses offer complete renovation control, dual-occupancy potential (R2 zoning), and ability to add value through landscaping, extensions, or modernization. Units require strata approval for internal changes (flooring, bathroom) and prohibit structural modifications. However, units benefit from body corporate maintaining common areas (lifts, lobbies, exteriors) without landlord effort. Houses demand active management or higher agent fees.
Choose UNITS if: first property purchase, limited deposit ($170K vs $390K), seeking cashflow/high yield, passive investor, or targeting young professional tenants. Choose HOUSES if: experienced investor, sufficient equity, prioritizing capital growth, willing to active-manage, or seeking family tenant stability. Portfolio strategy: purchase unit first for cashflow, then leverage equity into house for growth - classic "rentvesting" approach.
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Units suit first-time investors seeking high yields (4.1% vs 3.2%) with lower entry costs ($850K vs $1.95M requiring $170K deposit vs $390K). Houses suit experienced investors prioritizing capital growth (6.4% vs 5.6% annually) and long-term tenant stability (3.2-year vs 2.1-year tenancies). Portfolio strategy: start with unit for cashflow, leverage equity into house for growth.
Units deliver superior gross yields at 4.1% ($650/week rent on $850K price) vs houses at 3.2% ($1,200/week on $1.95M). However, units incur $5,200-$7,200 annual strata fees reducing net yield to 3.4%, narrowing the gap. Best yields: 2-bedroom units near Willoughby Station (4.5%), entry-level 1-bed units (4.8%).
Houses outperform with 6.4% annual growth vs 5.6% for units over 10 years. A $1.95M house grows $124,800/year compared to $47,600/year for an $850K unit. However, units show stronger recovery post-correction (22% vs 18% 2020-2023) and benefit from Western Harbour Tunnel proximity. Houses deliver superior long-term wealth creation.
Units: strata fees $5,200-$7,200/year, council rates $1,200-$1,500, water $800-$1,000, insurance $800-$1,200. Total: $8,000-$10,900/year. Houses: council rates $1,800-$2,400, water $1,200-$1,600, insurance $1,200-$2,800, maintenance $2,500-$4,000. Total: $6,700-$10,800/year. Houses have higher maintenance variability but no strata fees.
Unit tenants: 78% young professionals (25-35), singles/couples, median income $120K, prioritize transport proximity, 24-month average tenancy, faster re-letting (7 days). House tenants: 82% families with children, median income $165K household, prioritize schools/space, 38-month average tenancy, slower re-letting (16 days) but higher retention (92% renewal).
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