It’s easy to become obsessed with the endless stream of factors that come from choosing an investment property. The trends can change, the mindset of buyers can alter, and even the most seemingly minor factors can leave one property with the upper hand over another in terms of selling potential. One of the most enduring of these factors tends to be the age of a property, with the battle between old and new becoming a hotly discussed issue, especially as the barrier to entry has increased and the initial investment of any aspiring property buyer has become more significant.
As one of the leading property management services in Melbourne, My Rental is dedicated to providing Australian landlords with the assistance and insights they need to make informed opinions regarding their property investments. So, if you’re thinking about your next property investment opportunity, but aren’t sure whether old or new is the right choice for you, let’s take a look at which is likely going to be the better investment.
While there are some that will inevitably exalt the virtues of older properties above all else, that doesn’t mean newer properties are without advantages. Quite the contrary, in fact, as there are several boons that are unique to properties that have only recently come into being.
In the short term, for example, a new house that has been built within the past few years is far more likely to appeal to current trends and preferences than one which has been left relatively unchanged since the 1970s. This can translate to higher rental prices depending on your area, while at the same time lowering the amount of maintenance work and domestic electrical repairs that will be required in the home’s general upkeep once tenants move in.
On that note, another big advantage of buying a new investment property over an established one is that nothing has had a chance to degrade yet. Whilst older homes will invariably have little issues caused by long-term wear and tear; a new property should be a clean slate that avoids many of those trappings you would otherwise be buying into.
For those that are willing to go even newer than new, there are also those that prefer to buy investment properties that are yet to be built. This can allow you some level of customisation, and can also work out to be cheaper in many cases than newly-built properties. However, for those that are looking to start earning back their investment sooner rather than later, the waiting period on off-the-plan properties can make this difficult. The finished product can also differ from expectations, and the value of these properties can, in some cases, end up being lower than the investment required to acquire it.
Whilst a newer home may have all the accessories and modern conveniences, there are still those that will only go for older homes, and it’s understandable why. Older properties have stood the test of time, ensuring that the property you buy will not go out of style within the near future. There is also a sense of quality and authenticity that people associate with older properties. Many generally assume that they will offer more reliability than newer homes that haven’t proven themselves from a design point of view.
Another benefit of older, more established properties is that they have had time to accrue value. This is more to do with the land they are built upon than the brick and mortar home itself, but a home being built in a new area isn’t going to have had the same growth potential as a property in a neighbourhood with more history.
Looking for older homes is also going to offer you more options than waiting for a newly-built property that suits your preferences and budget. Although suburbs like South Melbourne, Docklands, and other more central locations may see a lot of new properties, these areas will only appeal to certain types of investors. Meanwhile, stepping into the outer suburbs will provide you with far more options, many of which are going to be established properties that have been around for several decades.
There are going to be a number of subjective factors in play when discussing the ideal property, especially when it comes to land vs home and other elements that we’ve touched on above. With that said, for most new investors, the better purchase is going to be an established property. This is due to the fact that they have had time to settle and accrue value, which, whilst still impacted by fluctuations in the housing market, hold less uncertainty in regards to how they are going to fare given that you’ll have a lot more historical data to work off.
With that said, for those that are planning to rent for a few years before selling, a new property is still going to be an exceedingly valuable investment. These properties come with less initial maintenance and repairs and will appeal to renters in the short term, even if their long-term viability isn’t always assured.
Want to learn more tips, tricks and news from the world of Melbourne property investment? Explore the My Rental blog today! As one of Melbourne’s leading property management services, we’re always here to help Australian property investors make informed decisions with their assets.
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