Buying Old or New? Here's 4 factors to help you decide
It’s the age-old question when buying: should you invest your money into an older-style Queensland home which can be improved with renovations or buy a newly renovated Queenslander allowing you to move into instant comfort?
Our agents are posed with this question daily, especially from investors that are new to the property game and let us tell you, it is a question with no right or wrong answer. When you’re deciding between old or new, here are our top four factors to consider:
Location: Is buying in your ideal neighbourhood important to you?
Many established suburbs have a charm and appeal that is not easily replicated. To invest or buy in these suburbs, you will probably have to buy old and renovate as new homes and blocks of land are sparse. Adding your own charm to an established home and neighbourhood is a sure way to investment success.
Lifestyle: Can you live in the non-changeable floor plan of an old home? Customisation may be key.
Buying old forces you to live within the current floor plan and without an astronomically expensive extension which will push your savings account to the limit, it’s not going to change. Old homes were obviously designed for different owners in a different time, which may not suit your twenty-first century lifestyle needs. So take the floor plan into account when deciding to buy old or new, especially if building a new home and customising a floor plan is an option for you.
Finance: Don’t stop at your mortgage repayment, consider the ongoing expenses as well.
A good reason why ‘old is gold’ is that you can renovate or extend the property to create equity straight away. But don’t forget to consider the ongoing need for repair and maintenance as well as the land and building costs in that area, so you can calculate this against the asking price of the property. New homes may have higher loan repayments but a lower cost of living which will put the investment financial decision on par.
Value: What are you looking to get out of your old or new home?
If you are looking for instant revenue, consider appreciation of depreciation. Investment properties are eligible to claim deprecation on all items of the property and the newer the property, the higher level of depreciation which is available to you. Remember new property prices are dependent on the market, so if the market dips due to an oversupply of stock through other developments in the area, you could find your property value will flatten making the depreciation pointless. Talk to a local real estate agent and find out as much information as you can before you buy.
Did you consider any other factors when buying your home? What was most important to you?