Buying new vs. Buying old
You’re exploring the property market and considering your options, including whether you buy a new house or an old one. Part 1 explores the case for buying old
More buying power
Buying a new property includes paying for the building itself as well as the services of the developer. They’re out to make a profit so they build margins and marketing costs into the overall price. You also don’t have a lot of power in terms of negotiating a better price. When you buy an established property you’ve got bargaining power and can negotiate a fair price, particularly if a quick sale is needed. If you buy a property in need of minor renovations or touch ups you’ll probably also pay substantially less than it’s worth and because other potential buyers can’t always see the building’s potential, you’ll have less competition.
Potential to add value
New houses are a bit like flat pack furniture – everything you need is included and there’s not much you can do to add value. An established home generally has more potential, particularly dated properties in need of modernising. As long as you avoid complicated and costly renovations like structural repair, you can immediately increase your capital growth with minor changes – something you can’t do with a new property.
Greater market knowledge
For a sound investment it’s crucial to know your market and buy in the right location. This is difficult when buying a new property, particularly if it’s in a new development. When buying an established property you can compare house prices in the area over a specific time period, allowing you to make an informed decision about what a property is potentially worth.
In part 2 we’ll outline the benefits of buying new but whichever way you go, you’ll need a home loan that suits you so contact us to compare Australian home loans and get your best deal.