Some people look to old property when deciding to invest, but most of them do not realise what they are taking on. There is money to be made in renovating an old home if you know what you are buying and have a good idea of what the market will value it at once you have put your blood, sweat and tears into making it look new.
If you are not willing to put the effort into renovations then you have to take into account ongoing maintenance costs on an old home. Even the most experienced investors get caught out with unexpected repairs like faulty wiring eventually going wrong or ceiling boards sagging due to damp roof spaces – the list is long – believe me I know!
There are many advantages to investing in new house and land packages that can save you $1000s and cause much less stress when compared to buying an old home:
This is the obvious one, but it is a very good one. As an investment owner you do not want to spend any time at all on your property avoiding the stress of repairs and maintenance. A good property manager that will do all of it for you but you still feel that nagging worry in your head. Then there is the loss of profit to deal with also.
A new property comes with a warranty on the structure and on fittings, which gives you breathing space and when the warranty has run out you at least have the luxury of knowing that the property is still new and in good condition.
A new property has a much higher depreciation value saving you thousands on your tax each year. Many investors use property investment to reduce their taxable income. If you are not in such a good position, the tax depreciation on one new investment property can still save you thousands of dollars.
This claimable depreciation is a great tool to gain more profit on your investment. A good property investment uses the tenant and the tax man to pay for the property and pay off your mortgage in less than half the time.
Greater Rental Yields and Better Tenants
A new home is more appealing to tenants and in good areas they will virtually queue to take a look. A new home attracts a better tenant who is more likely to look after the property and will pay a higher rent.
If your tenants are looking after the property it means less maintenance costs down the track and more profit.
Higher rents means you can pay off your mortgage in less time, which is the whole idea to investing in property – gaining passive income for life – income that continually rises and an investment that historically has shown to rise exponentially over the decades.
High Growth Corridors
Builders and Developers generally build in high growth areas where they are guaranteed to sell. These areas have all the advantages of being close to shops, schools, transport and employment. In South East Queensland the State and Federal Governments have spent $billions on infrastructure in key areas where the population forecasts are high. This means that the government has put its money where it knows it will be needed to cope with that population growth. Economic growth is also boosted by construction initially and sustained by new retail centres and commercial and industrial hubs.
All new homes come with a 6 star rating for energy efficiency. This means the tenants are warmer in the winter months and cooler in the summer. Energy saving fittings are also attractive to the more discerning tenant who is willing to pay more for these little luxuries.