Every property is different. From an established home to a new property, different properties present different opportunities. However, a new property will typically provide a number of advantages over an existing property, such as the deprecation investment property has, in a like-for-like location. Here are some of the advantages a new property has over an established home:
- New properties, more so than an established home, are desirable amongst tenants and will achieve a rental premium over a comparable older house. They are more likely looking for new properties over buying older property.
- New properties can be landscaped to a low-maintenance standard while buying older property may come with large gardens requiring ongoing maintenance.
- New properties are unlikely to require any maintenance in the short to medium term, while an established home may require (potentially expensive) work throughout the investment timeframe – and these costs may be unknown at the time of purchase.
- New properties can be built to appeal to tenant markets (for example, by including low maintenance gardens, adequate storage and security), whereas an established home may need to be adapted.
- New houses receive the full depreciation of investment property allowance on building costs and fixtures and fittings from the Australian Taxation Office.
- New properties can take advantage of being specified to handle the latest in telecommunications wiring, which is not a guarantee when buying older property.
We generally recommend you avoid buying older property as an investment, unless the property is suitable for a complete refurbishment or subdivision, or is unique in terms of location or architecture, as this can have an impact on the depreciation of an investment property.
Want know more the depreciation investment property can offer? Contact our team of Property Investment Specialists today to discuss the benefits of investment property depreciation and buying a new property over an established home.
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DISCLAIMER: This information is of a general nature only and does not constitute professional advice. We strongly recommend that you seek your own professional advice in relation to your particular circumstances.