Property Investing/ Property Advice: Series 3 of 7; Series 3: Property Strategy: Part 4

It is with great excitement that my last blog made it into the top 30 blogs for the week, in Australia. Through Feedspot.  https://blog.feedspot.com/australian_property_blogs

I believe you must engage a Buyers Agent with every property purchase, Using a Buyers Agents/Buyers Advocate and Property Advisor is key to more property investment success. These are extracts from my latest book “The Australia Property Investment Handbook 2018-2019″. In all good book stores now. Also Read Property Finance Made Simple and Property Investing Made Simple. Property investment, using buyers agents/ buyers advocates, is so important, and if looking in Melbourne for example, you should look for Melbourne Buyers Agents or Melbourne Property Advisors.

 

Should You Buy a New or Older Investment Property?

The higher rent, likely less repairs and maintenance, higher desirability for a tenant, lower stamp duty, lower holding cost, more depreciation, greater affordability to build a portfolio, and builder warranty, combined with any negative aspects of some new property, could still equal or be better than an established dwelling.

An established dwelling with lower rent, less desirability for tenants and higher repairs and maintenance risk, higher stamp duty, higher holding cost, less to no depreciation, with no builder warranty, but capital growth, won’t normally be as good with new property.

Valuations not stacking up with new property is a risk. Claiming the depreciation is not the gilded lily many people think. It simply makes the holding cost of the property more affordable until sale.

 

Benefits of New Property

  • If you wish to reduce risk of repairs and maintenance, then new is handier.
  • Light and space are maximised.
  • They usually offer more depreciation benefits, investors can use these tax benefits to assist with monthly cash flow.
  • Stamp duty savings.

 

Disadvantages of New Property

  • You pay a premium compared to older properties in the same area.
  • Too many similar properties being sold at the same time; depending where.
  • Difficult to add value by renovating or extending.

 

New Property Valuations

Things that may not be considered in a valuation:

 

  • Level of finish/quality, better quality means the construction contract price is higher.
  • Lack of comparable sales in the location. Developer sales are not considered acceptable comparable sales.
  • Values not understanding the product i.e. dual occupancy.
  • GST; lenders are starting to deduct this from the sale price.

 

Refer to www.propertyinvestingmadesimple.com.au to understand more about house and land style contracts, and off the plan.

 

Benefits of Older Property

  • More chance to negotiate.
  • You can potentially add instant value through renovating, extending, subdividing and/or developing.
  • Older properties are often situated on larger blocks, which usually drives property value upwards.
  • Better if found in well-established suburbs, which can demonstrate consistent growth.

 

Disadvantages of Older Property

  • Lower rental rates.
  • Higher maintenance costs.
  • Lower depreciation.
  • Higher holding costs.