Rise High Investor Weekly Video #43 – Should I buy an old or new property

Some key points to keep in mind:

When it comes to property investment, one of the key decisions you’ll face is whether to invest in a new or an old property. The truth is, there’s no universal answer—it all depends on your goals, strategy, and where you are in your investment journey.

New Properties: Pros and Cons

New properties are often attractive to investors for several reasons:

1. Low Maintenance
   New properties typically require less upkeep, which makes them appealing to both landlords and tenants. For investors who want a hands-off approach, this can be a big plus.
2. Tenant Appeal
   The fresh, modern feel of a new property naturally attracts tenants, often leading to fewer vacancies.
3. Tax Benefits
   One of the biggest advantages of a new property is the ability to claim higher depreciation, which can reduce your taxable income and improve cash flow in the short term.

However, new properties come with some considerations:

1. Slower Capital Growth
   A larger portion of the purchase price is allocated to the building (which depreciates) rather than the land (which appreciates). This means it can take longer for a new property to achieve significant growth in value.
2. Reliance on Tax Benefits
   While tax advantages are helpful, they shouldn’t be the sole reason for your investment. Tax laws can change, so it’s important to ensure the property stands on its own merits.
3. Limited Value-Add Potential
   With everything already built and completed, there’s little room to add value through renovations or improvements.

Old Properties: Pros and Cons

Older properties can be a great choice for investors who are looking for different advantages:

1. Higher Capital Growth Potential
   Because a larger portion of the purchase price goes towards the land, old properties often experience faster capital growth.
2. Value-Add Opportunities
   With an older property, you have the potential to create equity growth by renovating, subdividing, or even developing the property. This gives you more control over your investment’s growth.

However, older properties come with their own challenges:

1. Higher Maintenance Costs
   Older properties often require more upkeep and repairs, which can eat into your cash flow.
2. Fewer Tax Benefits
   Since the building is older, depreciation benefits are lower, reducing your ability to offset income with tax deductions.

What’s Right for You?

Ultimately, the decision to buy a new or old property depends on your personal situation and investment strategy. Here’s how to decide:

• New Properties may be ideal if you’re looking for low maintenance, tenant appeal, and short-term tax benefits.
• Old Properties might suit you better if you’re focused on long-term capital growth and enjoy adding value through renovations or other projects.

Remember, your preferences may change as your journey evolves. What works for you now may be different from what you need in the future.

Key Takeaways for Property Investors

1. New properties offer tax benefits and low maintenance but may grow in value more slowly.
2. Old properties can provide faster capital growth and value-added opportunities but may require more maintenance.
3. Align your choice with your current goals, strategy, and stage in the investment journey.

At Rise High Investor, we are all about helping you to navigate these decisions and find the right property for your needs. If you’d like tailored advice, reach out to our expert team today.