4 Reasons We Recommend Old Over New Property
If you’ve ever had a conversation with us about property you’d know we prefer to buy old over new. There are obvious exceptions to this, but more often than not, we recommend buying existing property. This includes period homes and older style property that was ideally built or renovated 7+ years ago, we generally steer clear of off the plan property and any brand new builds.
Here’s a few reasons why
1. Manufacture growth through renovations.
This is a key point we harp on with clients who are looking to buy real estate for wealth creation purposes. When you buy a brand new or newly renovated property, all you can do is sit back and wait for the market to push the value of your property up. However, if you buy something dated or unrenovated, you can renovate to add value to the property. The key here is ensuring you don’t overcapitalise, and understanding what will add the most value to certain property types in that particular marketplace. This means understanding what your next buyer is looking for and is prepared to pay for.
2. You have the ability to renovate to your taste
We’ve all walked through newly renovated property and picked it apart for the things we would have done differently. Statement tiles and black painted floorboards, split system heating when you really want hydronic… the list can go on. The value of buying unrenovated or dated homes is that you can update it to your own taste at your leisure, and not have to pay for someone else’s renovation you're either going to hate living with or pay to redo.
3. Size and longevity
Buying unrenovated generally means you’ll also be able to stretch the scope of the property you’re looking for. Perhaps you’ll be able to get that 3 bedroom house instead of squeezing into a renovated 2 bed that you’ll outgrow in a few years time. Houses used to be built on large blocks of land, giving the owners plenty of room to grow into the property, hence why generations before us usually stayed put for 30+ years! These full sized blocks are now being subdivided into multiple townhouse sites, of course increasing housing for our growing population (which is absolutely necessary) but also decreasing the size and liveability of the properties themselves. Meaning if we buy these new homes we’re much quicker to outgrow and transact the property before we’ve had a chance to recoup our stamp duty let alone gain any capital growth! Same goes for apartments, we guide our clients towards low density blocks that were built in the 30’s - 90’s as they tended to keep the individual apartment/unit sizes much larger than the shoe boxes we’ve seen built in recent years!
4. Scarcity
This is a basic supply and demand equation. They’re simply not building them anymore, in fact they’re pulling them down! Buyers love period features in property, soaring ceilings and ornate fireplaces dating back to the 1900’s add true value to property in Melbourne and will always be highly sought after. Nabbing a home that has these highly desired design details, perhaps hidden behind some dodgy 80’s tiling and peeling paint could be the best decision you ever made!
The caveat we ensure our clients are hyper aware of when buying 50-100 year old property is the immediate and often ongoing maintenance plan that will need to be managed to ensure you’re not left with a rotting, subsiding, damp, leaky mess….! Bunnings sausage anyone?
Get out there, get buying… and good luck!