old vs New..what to do???

Hi

Looking at invest and am confused as to what way is best..old house closer to Sydney CBD (bout 14km) eg ermington, rydalmere or brand new house and land package in QLD (eg bellmere) or Melbourne??
Really need some opinions as to what is best? pros and cons?
 
Looking at invest and am confused as to what way is best..old house closer to Sydney CBD (bout 14km) eg ermington, rydalmere or brand new house and land package in QLD (eg bellmere) or Melbourne??
Really need some opinions as to what is best? pros and cons?

rafters, this is really about long term CG, low vacancy and risk management.

Older in more established suburb:
PROS:
1. Known CG - it has a 'history'
2. Infrastructure already in place
3. In demand from tenants - rental demand / low vacancy
4. Quality of tenant
CONS:
1. Maintenance

New in more out-lying area:
PROS:
1. Depreciation
2. Low maintenance
CONS:
1. Quality of tenant
2. Higher vacancy (usually)
3. Lack of infrastructure
4. Developer has usually taken the first few years CG in his profit margin
5. If the market tanks, this type of product falls faster & harder

For my money it is always better going for older in established suburb. You can also do a small reno to make it even more attractive to tenants (this in itself gives you depreciation and takes care of future maintenance issues if done properly).
Possible exception is brand new infill development in an established area.
 
Old ... You pay stamp duty on total price
High maintenance
Low depreciation
Possible lack of care from tenant if it is too old
Highers cost for what you get
If home is brand new ... then you also pay profit to the owner who built it

New ... split land / home contract stamp duty on land only
Reletively inexpensive ... and you buy builder direct thus saving paying a profit to a speculator
Builders 6-7 year structural warranty
Massive depreciation
Low maintenance (Many items under manufacturers warranty)
Tenants (if selected well) love the home as it is new

For my money ... new wins every time
Melb ... some new estates grew over 17% last year when the medain for the state was negative %
 
rafters, this is really about long term CG, low vacancy and risk management.

Older in more established suburb:
PROS:
1. Known CG - it has a 'history'
2. Infrastructure already in place
3. In demand from tenants - rental demand / low vacancy
4. Quality of tenant
CONS:
1. Maintenance

New in more out-lying area:
PROS:
1. Depreciation
2. Low maintenance
CONS:
1. Quality of tenant
2. Higher vacancy (usually)
3. Lack of infrastructure
4. Developer has usually taken the first few years CG in his profit margin
5. If the market tanks, this type of product falls faster & harder

For my money it is always better going for older in established suburb. You can also do a small reno to make it even more attractive to tenants (this in itself gives you depreciation and takes care of future maintenance issues if done properly).
Possible exception is brand new infill development in an established area.

This is pretty much spot on....
 
rafters, this is really about long term CG, low vacancy and risk management.

Older in more established suburb:
PROS:
1. Known CG - it has a 'history'
2. Infrastructure already in place
3. In demand from tenants - rental demand / low vacancy
4. Quality of tenant
CONS:
1. Maintenance

New in more out-lying area:
PROS:
1. Depreciation
2. Low maintenance
CONS:
1. Quality of tenant
2. Higher vacancy (usually)
3. Lack of infrastructure
4. Developer has usually taken the first few years CG in his profit margin
5. If the market tanks, this type of product falls faster & harder

For my money it is always better going for older in established suburb. You can also do a small reno to make it even more attractive to tenants (this in itself gives you depreciation and takes care of future maintenance issues if done properly).
Possible exception is brand new infill development in an established area.

I agree with everything Propertunity has said.

My only point I would raise is the number of people that are all looking at the same criteria of property in the same areas. Due to this many owners of older inner city properties all already factoring in any reno buy and sell profit in their asking price in the first instance. I generally buy within 15 mins to the CBD.

Reagrds,
 
My only point I would raise is the number of people that are all looking at the same criteria of property in the same areas. Due to this many owners of older inner city properties all already factoring in any reno buy and sell profit in their asking price in the first instance.

That is true - and in some parts of the cycle you see people at auctions with puzzled looks on their faces making statements like "but this unrenovated one sold for more than the renovated one last week ????"

I think in these cases people want to put their own "stamp" on a property and are therefore prepared to pay more for a blank canvas.
 
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