Buying New vs Established Property

A lot of confusion and decision-making is involved in the process of property purchasing, this is especially true for first-time homebuyers.

If you are a newcomer in the real estate market buying either your first home or your first property investment, the most common and confusing question is- ‘build a new property or buy an established one?

We the Investn Group present this article with core points to be considered when deciding on ‘new vs old’ to help first-time home buyers with their decision-making process.

What is an ‘Established Property’ and a ‘New Build Property.’

An ‘Established Property’ is a property that has been occupied or owned for more than 6 months by someone.

A ‘New build property’ is one that has been newly constructed and refurbished and has never been lived in before.

Pros and Cons of an Established Property

Like everything in the world, established properties have a lot of advantages and disadvantages. First-time property buyers need to decide by measuring all the points and matching them with their budget, needs, family, and financial position.

Pros of the Established Property

• Buying an established property and moving in is a much faster process than building a new one. All you need to wait for is a settlement, which can take between 30-90 days.
• Building inspections can be done on established homes before the purchase of the property, to ensure the established house does not have problems that can cost to fix.
• Older-style homes have a charm that new builds do not have.
• Established properties have great potential to add value through renovation. Old-style homes, with contemporary renovation, are popular in the property market and can sell for high amounts.
• Established properties are usually in established areas. This gives the buyers access to facilities such as shops, transport, parks, restaurants, schools, and daycares.
• Established properties already have full-grown trees and vegetation, and a buyer doesn’t have to wait for 5-10 years for trees to grow to enjoy the benefits like privacy, shade, cleaner air, and greenery.

Cons of Established Property

• Properties that are older may need quite a bit of money spent on them. Renovation costs to turn it into your ideal home or repair costs due to the age of the building may mean the costs add up on your newly acquired property.
• Sometimes it is difficult to have all your dream visions met in the renovation- due to the fact that you are working with an established building that may have structural or council limitations.
• These properties are in areas that are established, developed, and desirable. This tends to make these properties expensive and unaffordable for a lot of first-time buyers.
• Maintenance costs can be an issue with established homes. You may find that you spend money on maintenance issues that still can’t be completely solved.

Pros and Cons of a New Build Property

At Investn Group, we have found there to be many pros with regard to purchasing a New Build Property.

Pros of a New Build Property

• Buying a new house and land package can be easier on your wallet. They can end up being 10 to 100,000’s dollars cheaper than the same size house in an already established market.
• Building a new home gives the buyer great liberty with regard to customizing the home according to their preferences. This design flexibility means it’s easier to get the exact design you want with no compromising.
• You can save on stamp duty. With an established property, you have to pay stamp duty on the purchase price of the house and land. With a new build, however, you only pay stamp duty on the land price.
• A newly built property means all the features and fixtures are new and under warranty, thereby saving you money. There is also a reduced likelihood of needing to spend money on repairs and maintenance jobs. This way, you can enjoy your dream home with no worry about looming costs.
• Building a new house, in a new estate, on the outskirts of the city often means you will be buying a property for a more reasonable and affordable price; in comparison to the competitive property market in the cities surrounding suburbs.

Cons of New Build Property

• Building a new home can take a long time to be completed, meaning you cannot move in right after it has been purchased.
• When starting a new build, it is important to check that the developer has secured all the permits to allow the building to start as soon as possible. That way, construction can commence sooner, and you can move in sooner.
• A lot of delays and cancellations can happen during the construction and building process, such as due to weather conditions or material supply, etc. Can you afford to account for this, and can you afford to move in later than expected?
• The cost of construction of a new house can be more than expected. It is necessary to consider the cost of renting or living elsewhere while your new property is being built, and if you can afford this.
• It is also important for you to consider when you can secure finance for settlement.
• With a new build, it is important to note what is included in the price. Take a thorough look at the contract. Is it a fixed price you have agreed to?
• Before you commit to a new build, you need to do your research. How much can you borrow? Will the council permit your building? What land features will affect the cost of your build? Is it a flat or sloping block? Is the soil acceptable to build on? etc.

How can you decide between a New Build Property or an Established Home as a First Time Home Buyer?

Consider the following questions:

• What is your current financial situation, and do you have any nearby prospects that can change your current financial position like a new job, promotion, expanding a business, or is there a possibility of future financial loss?
• How long are you planning on living in your first property, or do you intend to purchase it for rental purposes?
• Does the location in which you’ve decided to build a new home have all the basic amenities you may need nearby? – Such as schools, daycare, shops, and transport?
• What will be the estimated cost of a new build property vs. an established property in the locations you want to buy?
• What is the vacancy rate in the area you are deciding on?
• How soon do you want to move in, or how soon do you want to rent out?
• What is the crime rate in the area?
• Where do you want to live and in what kind of community do you want to live?
• What is the quality of the established property you are finding compared to the price you are paying?
• How long are you willing to have a mortgage?

These are the questions that helped our many clients at Investn in purchasing their ideal first home or property that would work best for their individual circumstances.

We at Investn can guide you every step of the way on this exciting journey to Invest in property with only $35,000. Simply Click Here to book a Free 15-Minute Discovery call