Brand New is Better With Property Investment in Australia
Stephen Covey said that there are three constants in life: Change, Choices and Principles. Always keeping a good hold of your principles, life gives us many choices and how we cope with change is one of them.
In the housing industry, homes change and deteriorate over time. We have the choice of purchasing new or older investment properties. People often ask us which is better. There are many variants that will affect your choice.
Here are some of the reasons why a new property is sometimes the better way to go:
- More Cost Efficient
- More Tax Savings
- More choices
- More Rental Income
- More Protection
- More Savings
- More Government Incentives
- More Time
New properties are built with new building methods. They are usually more energy efficient, have better security, more cost efficient utilities and appliances, a modern layout – and these attract quality tenants. After all, we know what we are getting.
The newer the property, the higher amount of depreciation is available to you on the property if you are an investor. At the moment 2.5% on the property can be deducted for 40 years. Air conditioners and dishwashers for example have a high rate of depreciation. The external building is also subject to depreciation. Your accountant will advise you on your tax position.
When purchasing a new property, especially one under construction or off a plan, you have more input and can choose items like floor plans and finishes. With your eye on renting out the property, you can look for hard wearing, low maintenance, on trend finishes that will appeal to future tenants and your pockets!
A new property means you can probably secure a higher rent – who doesn’t like brand new? Your tenants will most likely stay longer and you will have fewer vacancies. An empty apartment while you are paying off a mortgage is to be avoided!
In Queensland, builders take out a residential home warranty insurance against major building defects. This gives you protection in the event of a building problem – and peace of mind.
An older dwelling has age problems – like concrete cancer and other hidden costs. Electrics, plumbing, bathrooms and kitchens show their age! New means less spending on repairs! New means you have warranties and guarantees on your appliances. New means more energy efficiency and sustainability which lowers maintenance costs considerably.
A new property can save you thousands of dollars on your purchase. Depending what State you are in, as regulations differ from state to state, you may be eligible for Government incentives like the first home owner’s grant and stamp duty concessions. We can help guide you through these incentives.
If you are thinking of purchasing a property off the plan, you have the time to save, the time to change layout and fixtures and a longer settlement means that your property could have gone up in value by the time you settle.
Like us, properties age, things start to fall apart and need more work which means more costs. If you want peace of mind for about ten years, go new!