If you are in the market to expand your property portfolio, you may find the variety of property available overwhelming. Should you buy new or purchase an established home? There are pros and cons to both approaches. The key is in completing due diligence, seeking advice from trusted professionals, and ensuring the property aligns with your long-term investment strategy.
When purchasing a new property, you’re less likely to face immediate maintenance costs as everything is new. Most new builds come with builder warranties that may cover structural defences, providing added piece of mind. Newer homes are generally more energy efficient and climate-conscious in design, often featuring fixtures and appliances with higher ratings. They are built to meet current building codes and safety standards, negating the need for costly upgrades to bring them up to code. In the right location, newer properties can be an attractive option to tenants looking for modern living.
Off-the-plan purchases may come at a higher price, particularly in sought after locations. Often, new developments have smaller block sizes and the risk of delay in building competition due to supply or trade shortages is something to consider. It’s also important to consider whether key infrastructure, such as public transport, schools and retail centres, is already established or still in development – limited access to amenities in early stages of a development may impact interest and rental yield in the short term.
Established suburbs often offer more comprehensive market data, making it easier to assess growth potential and long-term investment performance. In many established areas, infrastructure is already in place and access to transport and amenities is already fully developed. Older homes are commonly situated on larger blocks, which may provide opportunity for subdivision or development (subject to council approval), if that is a consideration. Being a part of an already established neighbourhood can also be a strong drawcard for tenants.
The main downside to buying an older home is the potential for higher maintenance, repair or renovation costs. This is, of course, dependant on the age of the property and how well it has been maintained over time. It may require significant upgrading before it is suitable to lease. Older homes are often less energy efficient, leading to greater running costs for tenants, and may require upgrades to meet current building standards.
With such a broad range of property on the market, selecting the right one is a strategic decision that can significantly impact the performance of your portfolio. Whether you’re looking to purchase established or brand new, ensure your decision is backed by support of professionals across property and financial sectors.
Just as important is the team entrusted to manage your property moving forward. Ensuring you have the right team being you to support your growth is vital to the success of your investment and overall investment goals.
