Real estate investment is one of the most significant decisions of your lifetime. From capital growth to rental return, new property offers different returns depending on your investment strategy and financial circumstances.
There are pros and cons associated with both types of properties. While brand new properties often offer higher rental returns, but may take longer to appreciate in value; new properties have lower maintenance costs due to being less likely to need repairs as they age; however, this could require you to pay a higher upfront purchase cost.
New developments are constantly under construction in some markets; while in others, tight zoning restrictions or high permit costs make constructing homes harder than expected.
Investors who purchase off the plan properties have access to desirable properties in developments before they are released for sale on the market, giving them an edge when selecting properties with attractive design features, energy-saving appliances and cutting-edge tech that attract premium tenants and buyers.
First-time homebuyers will find new property attractive because it can provide significant incentives, including stamp duty concessions and the chance to customize kitchen and bathroom upgrades according to your individual tastes. Furthermore, as you watch your neighbourhood transform as schools, parks and other social infrastructure are built out and improve the overall appeal of the area, first home buyers may also experience its benefits first-hand.
New properties can make for excellent investment assets, providing potential tax perks to landlords. You may be eligible to claim depreciation on all the fixtures in a new property that have yet to be depreciated, meaning their value depreciates faster. Plus, tenants often prefer newer units over established ones which could translate to higher rents with shorter vacancy periods and greater returns for landlords.
Renovation can be costly and time consuming, and may take longer for its value to increase after completion. Furthermore, renovating is risky business as overcapitalisation could prevent you from reaping an adequate return.
Both options offer benefits, so it is crucial to assess your objectives and budget when deciding between old or new properties. Over time, either can lead to positive returns for your portfolio; the key is knowing which will work best.
Charles Reich, who passed away Saturday at age 91, made a brief splash in pop culture with his 1968 bestseller “The Greening of America.” But Reich is best remembered for his groundbreaking 1964 essay in Yale Law Journal “The New Property,” challenging courts’ view that property rights only extend to tangible items.
The article proposed that intangible assets, including welfare benefits, public employment contracts and licenses from governments should be treated similarly to land. This is because their holders have an implied right to fair and reasonable compensation when their rights are taken away from them.