When it comes to property investment in Australia, the options and opportunities are almost endless…
Houses, apartments, new, old, city, suburban and rural…
And that can make for quite a daunting situation for prospective investors, simply as a result of having so many options.
So, where do you start?
Well, at Propell, we love recommending NEW properties for investors.There are some major advantages to finding quality land at wholesale prices in high demand areas, constructing a well-designed home through a trustworthy builder, and renting it out to the ideal tenants.
Why are new builds so great for property investors? Well that’s a great question, stick around as we run through the 4 main benefits of investing in new builds.
1. Instant Equity
We don’t go about buying blocks of land the way you might be used to – we don’t wait around at the land office with 100 other people waiting to pick a block. Instead, we use our 20+ years of knowledge, relationships and network to find WHOLESALE property that can be purchased straight from the developer, before all of the costs associated with marketing and planning can be attached to the block’s price.
Essentially, this ensures that we can source property for you at a price that is under market value, meaning you can generate instant equity in your property, as the value of the build is already worth more than what you have spent.
Creating this kind of equity also comes with building a home that is high quality and unique – from structural concepts all the way down to having landscaping up to scratch, it all helps ensure that value is there from day one!.
2. Lower maintenance costs
With a new home, comes a natural decrease in the frequency, and therefore the cost of maintenance. Have you ever lived in (or owned) an older rental property? It’s safe to say, the older the place, the more you’ll be finding leaks that need fixing and fittings that need replacing – and it certainly adds up.
3. Premium Rent
As much as older properties can have that charm we all love, new homes offer that increased liveability, luxury and functionality – and together that means that you can offer the home at a higher rent.
Rent, and rental yield are important factors in anyone’s property investment plan, as it ensures that you are receiving adequate income for your property, allowing you to pay the loan back in an effective manner. We typically look for properties with a rental yield of 5-6% per annum.
If you’re keen on working it out yourself, here’s a simple formula for you:
Rental Yield (Per YEAR)
= Rental Income (Per YEAR)
DIVIDED by
Property Value
MULTIPLIED by 100%
For example, if a tenant is paying $750 per week ($39,000 p.a.), and the property was purchased for $775,000, the annual Rental Yield would be 5.03% (39,000 divided by 775,000 X 100%).
4. Attractive, Modern Living
Last but not least, building new offers an attractive home for potential tenants. It’s safe to say, modern living is definitely the preference of the wider population – but not at the expense of having a home that actually feels like home.
SO, the important thing is to combine the modern aspects of your build, with quality design choices, that help the place feel like home, like somewhere your ideal tenant would want to live.
Things like high ceilings, open plan living/dining/kitchens and plenty of storage can help take a more boring, straight edged home, and help it feel like somewhere you can really settle into!
At the end of the day, as much as we love new builds for property investors – depending on your circumstances, there’s always the possibility that we look at a different type of dwelling, whether it be a duplex, house or apartment . So, no matter your situation, finances and goals, we’ll ALWAYS work alongside you to build a plan and find properties that are right for YOU.
Interested in learning more about our Propell Property Plans?
Have a question, query or concern?
Give us a call on 1300 776 735, or send through an enquiry HERE – we’d love to chat!P.S. Want to know more about what you should include when building a new investment property? Check out the recent blog post!
