Villa units: What are they and why do we love them?

In some states, the terms Townhouse, Villa and Unit are interchangeable, but in Victoria, a ‘Villa Unit’ is considered a dwelling type in its own right.

What’s a villa unit exactly?

Villa units are generally single level, low maintenance brick homes built anywhere from 1960’s up to the 2000’s. There’s usually between 4 - 16 on the block, with little to no common area. If there is a common area, it's generally the driveway and small adjoining garden area. This is usually managed by an active or often ‘inactive’ body corporate. Meaning the owners corporation has not, in the previous 15 months: had an annual general meeting, fixed any fees or held any insurance monies.

How much is a villa unit?

If there are fees involved, they’re often low, generally around $1k - $2k per annum which usually covers insurance and perhaps a small fee for a gardener to tend to common areas.

Why is a villa unit a good investment?

Villa units have continued to grow in popularity as they offer buyers an opportunity to buy land in a great location at a fraction of the cost of a freestanding home. Unlike an apartment, you are purchasing the land that comes with the unit. However, by checking the title you may find that the courtyard isn’t part of the unit, it may be on a long term lease or simply considered common area so be sure to check exactly what it is you’re buying as that will affect the overall value.

You will also need to ensure you check what sort of title the villa unit is on. Some subdivisions are on a stratum title which is where you are not only buying your ‘lot/unit’ but also shares in the common areas. It’s a mix between strata title and company share and can cause some issues with lending so you’ll need to ensure your bank/mortgage broker is aware of it prior to putting forward an offer or bidding at auction.

When well maintained, villa units can offer an exciting opportunity to upgrade without serious structural works needing to be done. The floor plan is often workable as is and appeals to a broad market of downsizers, investors, young families, singles and apartment upsizers which is why they have consistently shown strong demand.

For more information on villa units and how to decipher the best one for future capital growth potential, strong rental yield and liveability, you know who to call.

Until next time!

Sam Davenport