Old or new properties? Which make better investments?

Brand new properties deliver benefits from depreciation to capital growth potential but older properties have the capital growth history to back them up.

So which is the better investment?

Here are some pros and cons from RealRenta to help you make up your mind:


Established properties- Pros

No limits to location- established properties are everywhere

Existing properties generally sell for less, so you may be able to buy under market value

Growth can be manufactured via improvements and addition


Established properties- Cons

Hidden defects and structural problems can be very costly and cause huge problems down the track

Renovations can be costly, blow out your budget and are dependent on council approval

Depreciation is lower than new properties


New properties/Off the plan Pros

Depreciation is at a maximum for brand new properties

New properties have all the high tech gadgets and fixtures that appeal to younger demographics

Less maintenance and repair and often still covered by warranty

Deposits for off-the-plan can be considerably lower than other properties


New properties/Off-the-plan Cons

New estates/sub-divisions tend to be far from city centres

Demographics attracted to these locations are generally interest-rate sensitive

Lower capital growth (location)

GST, developers’ profit margin and marketing costs

Increasingly, the motivation for profit often means subs-standard materials and workmanship

When rental agreements expire/terminate, the yield may no longer work in your favour

Off-the-plan/new properties typically attract a premium price

If the market cools during construction, the properties may be worth less than what you paid for

You may need to lower your rent in a new development if there is a large volume of properties that have come into the market at the same time.


Need a property or construction loan?

Contact us @ propertyloans@realrenta.com and we will arrange for our trusted Finance Partner to contact you soon.





Jason Gwerder
Tuesday, 18 June 2019

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