Five reasons to invest in new property, not old
When looking for an investment property, a question so many people have to ask themselves is should I be investing in new property or old property? The two types of property are both in abundance across the South-East Queensland residential real estate market right now, so it’s a difficult decision to make. However, there are some key advantages you have access to when investing in new property that just aren’t there with old properties – ultimately costing you more time and money.
1. Energy Efficiency
To start with, buying a new house or building one yourself means you can install energy saving and efficient measures from the outset. This makes it eco-friendlier (an attractive feature for tenants) as well as more cost-effective, with some energy efficient bulbs saving up to $60 in energy costs across its lifetime. Smaller electricity bills mean more money in your pocket and less towards the living costs of tenants.
2. Lower Maintenance Costs
This is an obvious one, but a newer property is likely to need fewer updates and renovations and more features and fittings will be covered by warranty for some period of time – making it easier and cheaper for you to maintain. For landlords, spending personal time on the maintenance of an investment property can impact the profitability of the investment. By buying a new property, you alleviate the need to spend too much personal time and money on the maintenance.
3. Higher Claimable Depreciation
New properties are obviously going to have a larger depreciation rate and value than old properties (if they have any). When you own an investment property, you should treat it as a business and this means being serious about tax. The higher the claimable depreciation, the more you can save in tax and this can make a big difference to the financial performance of the investment.
4. Better quality tenants, better rental yields
Newer homes attract a higher quality of tenants which means two things; higher quality tenants are likely to take better care of the property and they are likely to pay more for it. New homes position your investment well for good tenants so there are advantages financially and in the manageability of the property.
5. Growing areas – fantastic capital growth and resale prospects
New properties are typically in the high growth areas with strong population growth prospects. This means a few things for investors. Firstly, you can expect the properties will never have any problems with vacancy, meaning they will generate a healthy cash flow. Secondly, they are likely to improve in capital value as the suburb they are in grows and becomes economically successful and thirdly, these two factors create fantastic resale prospects. So, when you eventually sell the property, you are likely to make good money.
If you would like to learn more about the benefits and options you have when buying a new investment property, please get in touch with our team.