5 Reasons to Invest in New Property (versus older homes)

Property investment carries with it a degree of risk. What if the area the new property is located in doesn’t perform well? What if you end up with a lemon of an investment property that causes you financial losses instead of gains?

With the right research and property investment advice, not only can these risks be minimised but you can also greatly benefit from the advantages that come from investing in new property. Here are the 5 main reasons to consider investing in new property versus older homes.

1. New properties are usually built to a higher standard than older ones

Australian Building Standards have changed a lot over the years. What was once normal and accepted practice, is now considered outdated and unsafe. Many older homes will not meet current standards of design, energy efficiency and building materials. The building standards for new property, both in terms of energy efficiency and structural integrity, are far better than those of older homes. Not only does this mean that you are getting a quality product, but it also means that you are paying for the latest in modern conveniences and safety features.

New properties come with newer appliances, materials, and systems that require fewer repairs over time, meaning they can offer better return on investment over time.

2. You can often get a better deal on new investment property than on established homes

Newer homes often come with a lower price tag compared to their established counterparts, and they often come with added bonuses such as builder warranties, upgrades, or amenities that have already been included in the purchase price.The most significant advantage of Purchasing off the plan in any normal market is that you agree on the purchase price now, before the building has been completed.

As property prices could increase substantially during the time it takes to build the property, you could well be looking at a scenario where by the time settlement, or move in, arrives, your property could be worth more than the purchase price, otherwise known as capital growth. Additionally, if even more savings is on your wish list, there may be some incentive programs offered through government grants or even the developer themselves. All of this adds up to great opportunities for savings and satisfaction when purchasing new property!

3. New investment properties come with all the latest features and amenities that prospective tenants are looking for

Tenants are looking for modern features and amenities that will make their living experience more comfortable. Things like high-end kitchen appliances, extra storage space, air conditioning, larger balconies, and closets are all features that will attract quality tenants. When you buy a new property, many, if not all, of these features come standard helping you to keep your rental income high.

Apartment complexes often come with added amenities like swimming pools and gyms. These extra features will also add to the appeal of living in your property, making it more attractive to tenants.

4. The tax benefits of investing in new property

Investing in a new property can come with some great tax benefits. When purchasing off the plan, you could be eligible for significant stamp duty concessions and first home owner grants, meaning a big saving in upfront and ongoing costs. Additionally, you can deduct some of the expenses associated with maintaining your property from your taxable income. The Australian Taxation Office allows for a 2.5% tax deduction of the property’s value every year for up to 40 years, plus extra tax benefits from appliances such as air conditioners and dishwashers with an even higher rate of depreciation.

Besides the immediate tax savings, there are also other financial benefits to be gained from investing in new property. The residential property market can be quite volatile, but new property is comparatively more stable. This means you are less likely to suffer from large fluctuations in price and can be more confident about long-term returns.

5. New properties are easier to maintain and manage

When you buy a new property, you are less likely to have to deal with the same maintenance issues associated with an established home. New construction materials and appliances come with warranties that can help keep the costs involved in maintenance down.

New property investments can be easier to manage too. Many property investors opt to use property managers to oversee their investments, but with a new property, many of the normal maintenance issues associated with older properties are less likely to arise, making it easier and more cost-effective to manage your investment yourself and save on property management fees!

Final thoughts

The real estate investment journey can often be considered a daunting one, but investing in new property can provide an excellent opportunity to get ahead. Whether you’re just starting out or are looking to expand your portfolio, the cost savings, modern features and amenities, tax benefits, and ease of maintenance make new properties a great choice for real estate investors.

At Ironfish, we’re committed to helping you find the right investment properties for the best returns. Our team’s careful selection process consists of evaluating a range of factors, from developers’ track records of delivering high-quality properties to affordable price points in areas with proven capital growth. Pairing our deep understanding with a genuine passion for finding the right investment property for each investor, Ironfish is devoted to taking the guesswork out of investing in the property market.