When you look at the property investment market – especially here in Australia, it’s safe to say there are endless options.
Houses or apartments, city or regional…
And one of the other key options – NEW or EXISTING.
Now if you talk to some property investment companies, you’ll find that they have a cookie cutter approach to purchasing property – where each and every client receives the same advice for a particular type of property in a particular location.
That’s not us.
At Propell, we understand that each and every person’s circumstances and goals are different, and that lends to different strategy, and ultimately different property purchases. So, from a property acquisition perspective, it means we have eyes and ears on the ground, making sure we’re making the right decisions.
Sometimes it might be a new build in a regional area – but for some it’s an existing, established property (which is what we’re going to delve into today).
Advantages of purchasing EXISTING:
- Location
More often than not, really high quality existing property tends to be located in well established suburban locations.
And no, by high quality, I don’t necessarily mean it looks really pretty – but rather it’s something that ticks all the boxes as an investment.
The thing is, in these well established suburbs, there also tends to be a high proportion of Owner Occupiers, where people that own the properties, actually live in them. As an investor, finding locations where Owner Occupiers are the norm tends to come with stronger long term demand for an area, not to mention a genuinely better community feel.
- Established means established
When I say established, I really do mean established. As much as we do love purchasing and building brand new (check out the BLOG), it can be easy to get caught out purchasing somewhere that’s out of the way and doesn’t quite hold up on a demand front.
When you buy an existing property in the right location, what you’re also getting is well established infrastructure – things like roads and transport, medical and sporting facilities, alongside shopping and convenience. It’s important to note, because it can be very easy to purchase a new property and completely miss some of these things!
- No hold ups
As lots of people have unfortunately learnt over the last few years, with builders going bust and delays occurring well and truly on the regular, is that time is money.
If you find the right established property, you are creating an opportunity to generate rental income and add value almost immediately – there’s no waiting around for the home to be built, planning to occur and permits to be handled…
In fact, the place is right there in front of you, ready to go!
- Unique sale opportunities
Purchasing an existing, established property brings the opportunity to find unique sales that may be far lower than market price.
Distressed sales or estate sales usually provide these circumstances, turning a decent opportunity into one that will ensure you are generating equity in your home from day dot.
Disadvantages:
- Maintenance
As opposed to a new property, which, provided the build quality is of a high standard, should be limited in the amount of maintenance required – established properties can be very expensive when it comes to making hidden repairs.
So, it’s super important to ensure that you are doing your due diligence when it comes to checking the quality of a build, and getting the necessary inspections done to give you (and your bank account) peace of mind.
After all, no one wants to find out their foundations are dodgy after buying a home!
- Limited ability to generate value
Compared to purchasing an empty block – which is like a blank canvas to create value, purchasing an existing property makes things more difficult to add on or change in terms of creating solid value.
That’s why it’s important to find the right opportunity in the right location, in order to capture market growth.
At the end of the day, it’s all about weighing up these factors and ensuring that you’re doing what’s best for your unique situation and creating a situation that’s going to provide you with optimal long term value.
Wondering how to go about making that decision? We’re here to help – if you have any questions or would like to chat about how we build this kind of decision making into property investment strategy… Give us a call on 1300 776 735 – we’d love to hear from you
