Why you shouldn’t invest in shiny new houses or apartments – Part 2

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:

There are more tax benefits for new properties

There are indeed many tax benefits for new properties, but that is not the whole picture.

While you initially get greater tax depreciation allowances for brand new properties – which you pay for by paying a premium for new properties – there is usually slower capital growth in the first few years because you pay this premium for newer dwellings.

It is also a misconception that only new properties are eligible for tax depreciation.

Investors can claim depreciation on improvements to established properties and by working with a reputable quantity surveyor, you can ensure you receive maximum depreciation benefits in older homes and units.

This particularly true of renovated properties, which can deliver substantial depreciation benefits.

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
Monday, 14 June 2021

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