Which is best – new or old?
Whether you’re looking at buying a property for an investment or for a home, we’re often asked what type of property is best – and older, existing one, or a brand new or relatively new property?
Well, like everything in property, it depends!
If you’re looking for a home, one factor will be your preference for what you want to live in. Some home buyers will also be swayed by what first home buyer grants they are eligible for.
Property investors will view the property through a different lens; they will be considering what a tenant will find attractive, and what the potential returns will be.
Whatever the reason, you’ll definitely need to factor in your budget, the property’s location, how much work you’re willing to do and the cost of doing it but what else should you consider?
Here are some of our thoughts:
Buying an existing property
- The pros
For starters, there are more of them, so the chances are, you’ll have more choice! Furthermore, in well-established areas, the infrastructure is in place, and there is confidence in the location and the market itself. This means there are comparable figures to support the sale and rental price.
Other pros include:
- You can renovate it and add value
- Price may be more negotiable
- If it hasn’t got historic listing, you’ll probably pay less; this can be particularly attractive for those on a lower budget
- There maybe greater capital gains on an established property
Older properties often are filled with character, and often have design features, such as high ceilings, which many find attractive.
- The cons
The main downside to an existing property is potential maintenance costs, both in terms of time and money. For the investor, they may also find there is limited depreciation value.
Other factors include:
- Probably less energy efficient
- It may have outdated building code compliance which needs rectifying
- Older appliances and amenities may be out of warranty and need replacing
- Uneven floors and walls can make renovations challenging
First time home buyers will also not be eligible for the First Home Owner’s Grant (New Homes).
Buying a new property
- The pros
Being new, or nearly new, the chances are there will be fewer initial repairs and maintenance, saving the owner time and money.
Other pros include:
- More economical to run and maintain
- Often more environmentally friendly
- Many appliances, such as air conditioners will still be in warranty
- Potentially better designed for modern living
For the investor, there are a few more positives to buying a newer property; the chances are the property is at a standard where the tenant can move in immediately, thus saving vacancy time in preparing the property for rental. Many tenants are attracted to more modern homes, and there may be more tax-deductible benefits associated with depreciation. A specialist in depreciation can give you guidance on this.
- The cons
In well-established areas, there may be fewer new properties on the market, so there will be less choice.
Other cons include:
- Limited negotiating room on price
- There may be restrictions on how you use or add to your property
- Many new developments are further out of town
- There may be a slower capital growth
With newer properties, the standard design may not be attractive to home owners.
Regardless of why you are buying a property, we believe home owners and investors alike should keep an open mind; just because the property doesn’t tick the ‘old’ or ‘new’ box on the checklist, there may be plenty of other factors which make it right for you.
If you are thinking of buying an investment property, and you’ve seen a potential purchase, why not get in touch for an unbiased, experienced view? We can give you our thoughts on rental prices and suggest ways to enhance it and increase rental return.
We’ve been helping property investors and home owners since 1974, and we’d like to help you!
As a local and family run business, we’re committed to making your property management journey as stress-free as possible.
We’re always here for an informal chat about property and to answer questions, so give us a ring on 02 4956 9777, send us an email to mail@newcastlepropertymanagement.com.au or pop into our Cardiff office. Check out our Facebook page for more tips and ideas.