Income Resource Club > Property > New vs Old Properties Strategy
New vs Old Properties Strategy
New Properties
Advantages:
- Higher tax benefit;
- No maintenance;
- Better tenant appeal due to new design, technology, etc;
- Easy to rent if the asking rent is not too high.
Disadvantages:
- Lower capital growth in comparison to established properties in the same area for a few years;
- Higher purchase price due to premium for being new;
- Usually get hit first if the market slows;
- Very little room to add value;
- Price set by developers may be artificial or heavily influenced by organized marketing effort.
Old Properties
Advantages:
- Purchase price usually set by individual vendor without commercial manipulation;
- More solid growth than new properties due to heavier 'land content' component;
- Less price fluctuation than new properties in the same area;
- Potential to add value.
Disadvantages:
- Higher maintenance;
- Not as appealing to tenants;
- Future requirement for renovation;
- Lower than usual rent if the property is too run down.
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