Which is the better investment-old or new property

When purchasing an investment property, Which is the better investment-old or new property it’s important to identify the advantages of choosing a new property, versus an old property.  Both options have their advantages and disadvantages; identifying which one is best for your portfolio is key, and will prove to be rewarding in the future. Ensuring you have
a succinct property plan in place, which outlines your financial objectives will help throughout your
purchasing decision.

Your decision on which is the better investment old or new property will be guided by your research. Comparing the advantages and disadvantages of an old property compared to a new property

Which is the better investment-old or new property

Which is the better investment-old or new property

Advantages of buying new

1. Less maintenance
○ A new property will naturally come with minimal maintenance needs. The building’s
fixtures and fittings are all new, and likely to be less of a burden on your wallet.
2. Higher tax deductions
○ The Australian Tax Office allow owners to claim depreciation on a new building,
appliances and fixtures. This creates a worthwhile tax offset for investors.
3. Lower vacancy rates
○ Newer properties tend to attract tenants willing to pay a premium and therefore are likely
to have lower vacancy rates.
4. Peace of mind
○ When purchasing a new property you can be more confident that it will be compliant with
current building codes, standards and techniques.

Which is the better investment-old or new property

Which is the better investment-old or new property

Advantages of buying old

1. Lower price point
○ Because the building, fixtures and fittings are not brand new, the price of the property
may be more competitive than a new property.
2. Ability to increase value of the property
○ Older properties offer an opportunity for upgrades and renovations, meaning the investor
can significantly increase the value of the property and ultimately higher capital gains.
3. More established
○ Often an older home will exist in a well established suburb with plenty of amenities; a
positive for both buyers and tenants.

Which is the better investment-old or new property

When deciding which way to invest, it’s also important to interrogate relevant data to see how the figures
stack up over the long term.
Below provides a hypothetical analysis of buildings’ deductions over a one
and five year period, as well as expected annual cash return. Completing a deduction assessment will
provide true insight into the property’s financial performance and help with your budgeting and objective
planning.

If you’re keen to understand more about the benefits of buying an older property versus a newer property,
contact me today on 0418 616 630 to determine your objectives, and how best to achieve them.

Complete the the inquiry form below and we will contact you to arrange a suitable time to discuss your needs

Source: BTACS, November 2015, https://btacs.com.au/ensuretoclaimdepreciationdeductionsforyourinvestmentproperty/

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