There are certain advantages and risks to be aware of when buying old or new property. These are enlisted below:
- Market comparison: An estimated value of the property can be derived after comparing it to similar sold properties in the marketplace.
- Value added opportunities: Investors can renovate the property increasing its profitability.
- Maintenance issues: Older properties can have structural issues. Enlisting the help of a building inspector can avoid nasty surprises later on.
- Incentives and deals: Tax depreciation and stamp duty benefits can reduce the holding costs of your property by a significant amount.
- Lower maintenance and upgrade costs: New properties have lower maintenance. Luxuries such a swimming pools can be costly to add into an existing property.
- Unpredictable growth: Apartment blocks in a recently zoned area could be difficult to rent out if there is an oversupply of units.
You should do an in-depth analysis to ensure you buy the right property in the right location. This will maximize your capital growth potential and/or rental return.