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The big match up: buying old or buying new

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Your Investment Property | 17 Nov 2011, 12:00 AM Agree 0
It’s long been a debate in property investment circles – do you go for older more established dwellings or brand new properties? The answer may surprise you.
  • Josh William | 01 Oct 2013, 11:47 PM Agree 0
    Thank you for these tips, I just want to add something that You have to take care of the Cleanliness of the new home you are buying or renting make sure that new houses are well constructed and they have materials that are totally new in the construction phase.
    Best Regards,
    Josh William
  • RCampbell | 06 Mar 2014, 04:01 PM Agree 0
    I think this writeup offers a great comparison between new and used property. I agree with Nora in that both new and used properties have their distinct advantages, and it really comes down to an individuals investment goals and circumstances.

    Other considerations to factor in when choosing between new and used property include: location, capital growth potential, local transport and infrastructure, government investment in the area, builder warranties, potential stamp duty savings.

    R. Campbell.
  • Sean O'Rourke | 22 Apr 2014, 02:53 PM Agree 0
    Good article but I would have liked a discussion on the time value of money. Buying a new property, or one to be constructed within the next 12 months, gives the purchaser the price of an asset in today's dollars that won't be ready until a future date. i.e many builders experience 6-12months of capital growth for their house whilst it's being constructed.

    Furthermore in WA new constructs are considerably cheaper than established properties and government grants are also better.
  • Nick Holden | 23 Sep 2014, 07:23 PM Agree 0
    Nora Surya and Alex Huang had a very well balanced and intelligent opinion to the question. Well done. Can't say as much for this though: 'Raptis believes buying new is definitely a no-no if you’re looking for the ideal investment'.
  • Peter | 08 Nov 2014, 09:21 AM Agree 0
    I just purchased my fourth property. I never thought I would even consider buying new, but after a poor condo experience I found myself shopping. I live and work in a booming bedroom community near a city of a million. I would have loved to buy in the thirty year old established community near the school where I work, but even the small fixer uppers quickly go at the top of my budget. I was able to purchase a full ownership townhouse with a very large garage and 30% more room, all the upgrades, only 1.5 kms farther away for the same money. I had to wait six months for possession, but new ones with less features are now selling for $30,000 more. I keep questioning my decision until I compare what's come up since. As for suggesting there is no opportunity to add value, I disagree. There is still a yard to be custom landscaped and a basement that could be developed.
    • J | 19 May 2015, 11:00 PM Agree 0
      your ',but' is annoying! please write in complete/proper english mate.
  • Lee | 18 Oct 2017, 03:41 PM Agree 0
    Great article with lots of balanced considerations for each option. I'm in SA, where building a new home (in some areas) is still significantly cheaper than buying established. There is also the added consideration of only paying stamp duty on the land value with a new build, as opposed to paying stamp duty on the entire purchase price of an established home.
  • | 28 Feb 2018, 11:52 PM Agree 0
    One of advantages of buying an old house is the big land size nowadays the new houses was just one third of the land size of the old house. Hence old house more cheaper and its more durable lastly the government will remove the first buyer home grant.
  • Jules | 01 Jun 2018, 05:10 PM Agree 0
    Location is the key. Older homes are built better and get the right renovation and people go wow. New houses done by most mass produced firms are nice but cheap and in 5 years u see what I mean. In terms of investment. I'd say established, looked after, good mid suburb, and schools transport and shops on close proximity.
  • William from ParkTrent Property Group | 06 Sep 2018, 10:43 PM Agree 0
    It seems that most of people do not quite understand what is the benefits from investing property. After you really understand that kind of strategies, I beleive you will accept buying the right new property is the best way for making money. The established property has lost its essential advantage such as entry markey price.

    The benefits of investing property:
    1. Tax saving by negative gearing. So new property has more items for depreciation other than an old house.
    2. Rental return rate is higher than an established property's. Please remember rental return rate is not the rental cash received from tenants. The healthy IP should have at least 5% rental return rate. For example, 1m property in Parramatta, if the weekly rent is at 1000, and it is 5% rental return rate. But obvisouly, it is very hard to achieve now, the market value is at about 600/week, it is around 3% return. But new property at 400K value in Ipswich, the weekly rental can be at 390-410/week. So it is more than 5%
    3. At the same location, the new property is always attract good tenants other than old house.
    4. Most of new builds are in new developing estate, so the land price is lower than the land in established area. We all know the capital growth is due to the increase of land value no the building because the building is depreciation. So old property is not worth on it.
    5. New property most will be negotiated with best deals such as stamp duty concession, rental guarrentte and so on
    6. Buying a house and land package, only pay stamp duty on land settlement so it is much cheaper than buying an established house for stamp duty.
    7. Currently, house renovation is much more expensive than a new build because of the ordering of material and laboring cost. A bath room basic renovation is at about 10-15K.
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