When considering an investment property, many buyers are unsure whether to buy a property that is new or ‘second-hand.’ The differences are important to consider for investment success when purchasing an apartment.
New properties, despite a higher price tag, can offer less maintenance and greater energy efficiency for investors plus higher depreciation allowances at tax time. Conversely whilst purchasing a new property off-the-plan has the benefit of a longer settlement period and stamp duty savings until June 30 this year, the possibility of differing value between purchase price and valuation price, and also the estimated rental return vs achieved rental return, has the potential to leave some owners with unfavourable financial implications.
Older or ‘second-hand’ properties often have the advantage of a more affordable price point and a more sizeable property offering. They may also offer an opportunity to add value through simple updates or renovation, although overcapitalizing should be avoided wherever possible.
Lucas Sales Director Chris Henson states that “many buyers are pleasantly surprised by the affordability and size of older apartments in the Inner City, especially when compared to similarly configured brand new apartments. Quite simply our buyers are finding they ‘get more bang for their buck’ with second or third-generation property.”
Dylan Emmett, Lucas Property Manager Director, adds that it’s imperative buyers do their homework prior to purchasing to ensure investment success. “If you are considering different investment properties, we are happy to provide a neutral second opinion on which property will potentially have wider tenant appeal, better capital growth and stronger rental returns prior to purchase.”
For a complementary rental market appraisal of your investment property or current home, or for a report detailing the recent rental results in your building or suburb, please contact our award-winning team on 9091 1400.