New or Old? What is the better investment? Many of our clients want to know whether it’s better to buy an old property – or second hand property or a new property. For investment purposes, there really is only one answer, and that’s a new property. The main questions you need to ask yourself for investment purposes, are: How much will it cost to buy? How much will it cost to keep? And what are the tax implications? When you buy a new property, you know what the history is.  That is, there is no history.  Therefore if there are any issues with the property the builder or developer is clearly libel and the investor can enjoy 7 years of builder’s insurance.  So the holding expenses are predictable. You can comfortably expect that the main holding costs you will incur are: property management fees, strata or body corporate fees if you purchase an apartment, utilities and council fees if you purchase a house, and the interest payable on your loan. Not unexpected expenses, such as termites or a rooftop caving in.  All things we’ve seen clients go through at Calla Property. These expenses are very hard to recover from and impact cashflow from rent as well as paying for the remediation of the property. A new property will also adhere to the latest building regulations and will hold its value for longer than an unimproved second hand property.  This is particularly important if you buy a property in an area that has been affected by severe weather events like flooding or cyclones. An investment in a new property will give you maximum tax benefits through depreciation.   Even a property that is 2 or 3 years old will reduce your ability to claim depreciation by 2 or 3 years. Depreciation is a powerful accounting tool that reduces your taxable income. An investor is also wanting to maximise their income through rental payments.  New properties are the most desirable kind of property for Generation Y – which is the renting population. There is a strong correlation between age of the renter and age of the desired property. So if you’re wanting to invest wisely, in a property you can afford, then call Calla Property.  We’ll show you the best suburbs in Australia to invest it and help you with every aspect of the property buying process.  Make an appointment today and secure your future on 02 9016 2852

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