Why buy new?
This is a question we’re asked regularly at Eclipse. While buying new is not suited to everyone’s situation there are significant financial benefits
When making a decision as big as purchasing a property, whether as a home or an investment, financial help is almost always welcome. When purchasing a new home, you may be eligible for government grants that can ensure more money in your back pocket.
For example, right now in South Australia the $15,000 HomeBuilder grant is available for people who choose to build their new home. ‘Build’ doesn’t necessarily mean you have to undertake an arduous process either. Homes that are yet to be built but are ‘off the plan’ meaning they are already entirely designed, still qualify for this incentive. However, contracts must be signed before the end of March and applications for the grant submitted by 14 April 2021.
Depreciation in new homes
Did you know that as an investor you can actually claim your property’s depreciation? Not just that, but the fixtures and appliances count too. This depreciation value is only applicable to a brand new home (prior to 2017 this could be claimed on any investment property).
So much so, you couldn’t potentially take your property from positive gearing, to negative gearing without any additional outlayed expenses.
Higher rental yield
If you’re purchasing a property for investment purposes, you’re looking for the highest yield possible. Though older homes have their benefits, often renters are willing to pay more for a newer home. The less dings, dents, discolouration and scratches they can spot, the higher the rent could be.
Defects and warranties
Whether renting out your property or choosing to make it your home, aspects of a new property provide a peace of mind that isn’t necessarily available with an older space. Things such as unexpected breakages, dry wall, leaks, broken appliances and complicated plumbing issues can sometimes crop up when purchasing an older property. Unfortunately no matter how thorough your pre-purchase checks are, these things can… slip through the cracks (pun intended.)
New builds often (or should) come with a warranty period, so any defects you (or your tenants) detect can be fixed quickly and cost effectively.
Though no one can truly predict the ups and downs of the property market, typically, new houses hold their value for longer when located in the same area. This means you’ll be able to get ahead when it comes to the capital growth curve and hopefully save yourself more money in the long run.
Though buying new isn’t to everyone’s needs or even tastes, there’s no denying the financial benefits to be found in purchasing a brand new property.
To understand the market in your area, don’t hesitate to contact Eclipse Real Estate to discuss the best option for your future.