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Old vs new

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| 16 Jan 2012, 06:12 AM Agree 0

It's probably been discussed on this forum already, but I was wondering what people thought about the old vs new debate. I like the idea of buying older properties for their add value potential - is this outweighed by low maintenance, depreciation, etc. that new properties offer?
  • MyPropAU | 17 Jan 2012, 10:38 PM Agree 0
    Yes, what’s best for the rental property investor when looking to buy? Consider a new property or one a few years old? Everybody likes new, so it’s important to put your emotions to one side and work out what will give the best return. My experience in property investing is that its likely a property a few years old will make me the best investment.

    True, it won’t have the brightest finishes or contain the latest appliances, but there are good reasons to consider an older property. My recent purchase was in Gladstone. More info here, Before my visit to Gladdy I did a lot of research and knew exactly what the type of property I wanted to buy. It was a 4x2x2 in a location not too far from the CBD and close to schools, shopping, entertainment and transport.

    Why not buy new? There is a lot of new property for sale in Gladstone. House and land packages. Although a new property will provide the maximum depreciation tax deductions, a property a few years old will still have many years or valuable depreciation benefits. And, depreciation can make the difference of making a property cash flow positive and assisting in the investment growth. For me, I don’t like the thought of paying developers premium on a house and land package.

    I believe a house say 3 -6 years old can be purchased without a developers premium offering better value. The location could be better as well in a more established location and likely larger land size as well. Rental values should not be that much different either. A property over 10 years may also offer the opportunity of a cosmetic referb, including possible rendering, painting and floor coverings. This could lift the capital and rental values showing a faster property return.

    Using an online investment property advisor and manager will assist in making property wealth faster. The determined property investor will always be looking to outperform the market by finding rental investment properties in growth areas to maximise his wealth creation as fast as possible.



  • dingo32 | 03 Feb 2012, 04:44 AM Agree 0
    Thanks for that, and sorry for the late reply - been away for a while. So it sounds like you're not a huge fan of new property. Do you think that the selling points of new property (better depreciation, lower maintenance, etc.) are mainly what the developers are telling us to sell their stock, or are there some genuine bonuses for investors there? What about things like the $10k Queensland bonus? Is it worth chasing the free money to buy new property, or is it not worth it in the long run?
  • Markjames220 | 17 Jul 2012, 06:03 AM Agree 0
    Buying older is best than buy new property. There is small opportunity to add value to a new home. Older investment property is Equity, Affordable. Older homes frequently have great features which can’t be replicated in new homes. Location fixation is another positive point.
  • Brock Chewings | 18 Jul 2012, 06:08 AM Agree 0
    "Buying older is best than buy new property. "

    I agree with you... but, this fact sometimes result in reciprocal... especially now that some places that have their own version of economic recession... in this case, people tend to sell their property at a price sometimes lower than the real cost and value... and mostly a bit hard to deal with this lose...
  • Eos Property | 26 Jul 2012, 01:12 AM Agree 0
    Defining 'old' and 'new' is the key to this whole debate.

    Properties around 3 - 5 years old still have plenty of depreciation left in them with reasonable maintenance costs. Choose wisely and you can also add value to your investment.

    Depreciation runs out over 40 years but it is fair to say that in most cases the bulk of any depreciation claims are available in the first 5 years of a properties life when plant and equipment claims are at their greatest. After about five years your greatest claim tends to come from capital works (the building) which remains constant throughout the life of the property anyway.

    Having said all of that 'depreciation' and subsequent tax benefits should only be seen as the icing on the cake - they should not be the reason for choosing one property over another.
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