NEW VS OLD PROPERTYGet In Touch!
NEW VS OLD PROPERTY
Once you’re clear on your long-term financial goals and the strategy you’re going to undertake, then you can start looking at properties. But what precisely should you be looking for? Exactly which type of property you go for depends on your goals, strategy and level of involvement. However, there are a few decisions that you can make which will maximise your chosen route. Some investors swear by brand-new properties; others prefer established dwellings. Each has its pros and cons. Buying New Property New properties are typically attractive to passive investors who are time-poor and would like to have a property that requires little effort on their behalf. There is usually lower maintenance, and if there happens to be any defects after completion, the builder or builder’s insurance should cover any cost involved. New properties are also appealing to tenants, as they usually have lots of light and space. Tenants with good incomes are often prepared to pay higher rent for new properties, particularly if they are situated close to their work. From a tax point of view, new properties usually offer higher or longer depreciation benefits, not only from the fixtures and fittings but also from capital works. It is possible for investors to use these tax benefits to assist with monthly cash flow. However, the cost to purchase new properties may be higher than an old property in the same area, as developers have to cover their costs and profit margins. This can mean it takes longer to realise capital growth. Growth may also be affected by the fact that there are a few very similar properties being sold at the same time, such as in a brand-new development – as a few hasty resales can affect the values of all the properties in the immediate area. Brand-new properties also don’t allow much room to add value by renovating, as all the work has already been done by the developer.