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
