How old is too old?

[Totoro]

Hi,
I'm looking to buy my first IP, in Sydney. From all that I've read and heard so far, it seems like the best option is to buy an apartment that's not older than 10 years old, to maximise depreciation and minimise maintenance and repair costs. I've also read that most apartment buildings are made to last 30-50 years. So if I buy an apartment that's already 15-20 years old, will it have much resale value in 10 years' time?
Obviously, this won't hold good for free-standing houses on land since the value of the land would appreciate in 10 years.

What do all of you think?

 

[ianvestor]

Inner-city apartments are also on land (the flat stuff found just underneath the apartment block), which appreciates.

Do you have a high taxable income? If not, I'd say don't bother focusing too much on the depreciation aspects.

 

[Propertunity]

I'm looking to buy my first IP, in Sydney.

Congrats!

From all that I've read and heard so far,

Read where and heard from whom?

it seems like the best option is to buy an apartment that's not older than 10 years old, to maximise depreciation and minimise maintenance and repair costs.

This is all good from a tax perspective but what about CG? Some 10 yr old buildings are out of warranty and have more issues than some of the 1960's units I have been buying.

I've also read that most apartment buildings are made to last 30-50 years.

Again read where? There are some great buildings built in the 60's and 70's still growing heaps in the CG stakes and have had renos.

So if I buy an apartment that's already 15-20 years old, will it have much resale value in 10 years' time?

If you do your DD it will. Ask the same Q 20 years ago when units that were selling then for $50K that are now selling for $400+K

Obviously, this won't hold good for free-standing houses on land since the value of the land would appreciate in 10 years.

Units have a land component too.