Brand-new property refers to any piece of real estate that has never before been used as residential real estate. While some new builds can be constructed on existing land, others must be constructed from the ground up based on exact buyer specifications – making new properties often more expensive than established ones and more challenging for first-time buyers to afford.
However, investing in new property may prove more financially sound when considering tax benefits. Investors who purchase new properties can claim depreciation deductions on all plant and equipment assets as well as the building itself – something second hand property investors cannot claim against their annual expenses.
Buyers of new property may also qualify for government grants and incentives not available to second-hand property purchasers, further lowering purchase prices while increasing investor capital gains potential.
First-time investors often turn to new investment properties because it allows them to secure sought-after locations before prices increase too significantly. By doing this, they can enjoy both capital growth and higher rental yield while still affording their loan repayments on the property. Unfortunately, however, this strategy can be risky since you are betting all your money on one suburb for its performance and return.
New properties generally present themselves for sale in near-pristine condition, making them more appealing to tenants and increasing its market value. This could include no visible scratches, dents or stains on walls, trim, flooring or appliances and in some cases “green” houses designed specifically to reduce energy costs while increasing value of the home.
An unfortunate aspect of new-build properties is their limited potential for increasing value through renovations or improvements, which may present investors with challenges when building an investment portfolio that’s both positively gear and diversified. But wise property investors can easily offset this issue by purchasing properties with various locations and types – each providing different growth potential in time.
Brand-new properties may not be ideal for everyone, but they can provide a hassle-free investment option and generate steady streams of income. Be sure to do your homework and carefully consider both pros and cons before making a decision. To learn more about investing in property contact our team of expert consultants; they’re happy to assist in finding an investment property that will meet both your financial goals and offer great returns – we even offer free property reports!