Why you shouldn’t invest in shiny new houses or apartments – Part 1

The fresh smell, the clean slate, the low maintenance, and the primal need to be the first to mark your territory: are just some of the reasons why buying a brand new house or unit is enticing.

However, that doesn’t mean it is a smart decision.

The truth is, there are no ifs or buts about it – established properties make the best investments.

When it comes to property investing, you can’t be distracted by the lure of superficial appeal.

It has to primarily be a financial decision – which means leaving your own desires and prejudices at the door when looking at established properties.

"But new properties are so much nicer,”I hear you interject.

Nice doesn’t cut it as an investment strategy –and I’m fairly certain that no matter what your objection is, I have an answer for them all:

New properties are easier to rent

There’s no denying that tenants can be just as swayed by their emotions when deciding where to live as we are as investors, deciding where to buy.

But here are a couple of home truths you need to consider when buying an investment property:

1.Australia in general, and capital cities in particular, has a shortage of good rental properties in prime locations. With a swing away from the Lego Land high-rise towers limited, renters are flocking to established properties in droves. Other factors like location and rental costs will continue to be major drivers of the rental market.

2.If you are thinking new properties are easier to rent, you probably aren’t alone. Chances are if you buy a unit in a brand new apartment complex, it will be filled with investors just like you. I prefer to buy in predominantly owner-occupied areas because the buildings are generally better cared for and there is less competition (and as a result, higher demand) for rentals.

3.Buying an established property does not mean that it has to stay as it is – in fact, I recommend looking for existing properties and then adding value through quality refurbishments.

RealRenta has all the tools that a property manager has, but at over ¼ the cost of a property manager.

Join now and the cost is less than a cup of coffee a week to manage your rental property

RealRenta also has a free vision, so why not check it out

Jason Gwerder
Friday, 11 June 2021

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