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Should you buy in an established suburb or should you find some land and build a brand new home?
Whether to by an old home or build a brand new one is an age-old property question and a lot of the time the choice comes down to personal preference.
But is one better than the other?
Let’s take a look:
The pros of buying new
• Modern living standards – Many buyers prefer new homes simply because they are built with modern lifestyles in mind. When building a new home you can design a home to your exact specifications and include all of the latest mod cons. New homes are also built with energy efficiency and environment sustainability in mind.
• Easier to maintain – One of the best things about new homes is that there’s nothing to do but move in and enjoy. New homes are an appealing option for both owner-occupiers and investors that don’t want to worry about unplanned maintenance or repair costs. If there are any issues with a new property in the first few years it should be covered under the builder’s warranty.
• Investment benefits – New properties can be very appealing to investors. They normally attract higher quality tenants and tend to have lower vacancy rates too, simply because most renters want somewhere that is clean, modern and hassle-free. New properties also come with maximum depreciation benefits.
• First homeowner grants – First home buyers that want to take advantage of first home buyer grants around the country will need to look at new homes to meet eligibility requirements.
The cons of buying new
• Hard to add immediate value – Investors should note that there’s not a lot of room to add instant value with a brand new home, so you’ll need to rely on capital gains alone.
• You have to wait for it to be completed – If you’re buying a property off the plan, you’re essentially buying a property that doesn’t exist yet. This can cause grievances if the property doesn’t end up looking how you expected or if the build takes longer than planned. Sometimes there are also hidden expenses along the way that you might not have budgeted for at the start.
The pros of buying established
• Buying history – Old homes tend to have a lot of charm and character and they can tell a story about they time in which they were built in. When you buy an old home you’re not only buying bricks and mortar, you’re also buying a piece of history, which could hold significant value to some buyers.
• Closer to cities and infrastructure – In general you’ll find that most properties found in inner city areas are older homes, with new properties generally built in new land releases further out of town. In many cases if a buyer is looking for an affordable property near a capital city, they’ll have no option but to look at older homes.
• More potential for value adding – If you’re willing to put in a little bit of hard work (or pay somewhere else to) then you can add significant value to an older property, particularly if other people can’t see its potential.
• Established landscaping – One of the major differences you’ll find in old estates versus new is the trees and gardens. Established properties can have beautiful established gardens to match, and trees that have taken decades to grow. This can be hard to replicate in a new residence.
The cons of buying established
• Maintenance and repairs – Older homes can have hidden problems that may be hard to see on the surface. Costly repairs that can arise in an older home include re-wiring, replacing asbestos materials or replacing old pipes and guttering, just to name a few.
• It’s not new – If you’re used to living in a modern home, transitioning to an older home can take a little bit of getting used to. Older homes generally have some quirks, or an unusual layout, and you may need to spend money on renovations if you want to add modern luxuries like air-conditioning or a dishwasher.
There’s a lot to consider when buying a home and whether to buy a new or established property is just one part of the equation.
Both new and established properties can make fantastic homes and investments and what is right for you might be determined by your budget, where you want to live or your investment goals.
It’s also worth keeping in mind that different property types will be in greater demand in different areas depending on trends and the preferences of local residents.