If you’ve made the decision to invest in property, your next choice is probably between buying a new investment property that is ready for a tenant to move in, or buying an existing property, finding a property manager, advertising and sourcing a tenant to move in.

One big advantage of buying a new investment property is that you’ll get a property that’s been specifically designed and built to be rented out. In other words, it is designed more for durability and multiple tenant privacy than a normal home that may be built for luxury, so to speak.

The other reason why new property is the most popular property of choice is the great tax benefits. New property offers more tax benefits via tax deductions and multiple tax depreciation divisions. New property often comes with builders guarantees and warranties so that no ‘out of pocket expenses’ should be incurred for repairs during the offered time frame.

New property is also purchased at the lowest price the property will ever be valued at, as capital growth with increase the overall value of the property over time and you are therefore not buying someone else’s growth.

The only advantage of older property is the scope to renovate and increase the value of the property. However the down side is the older the property the higher the cost to maintain it to its current value, and this is the opposite of what we are trying to achieve.

Buying an older property is sensible if you have both the time and skill to improve it and increase its value however many renters don’t like living in older property and prefer newer property making new property far more desirable and in demand.

Here are some of the benefits of buying a new investment property:

Tax Depreciation

New property offers 2 types of Tax Depreciation (Division 40 & 43) that will reduce your taxable income and therefore allow you to use the returned tax to pay down debt or purchase another property.

Demand

There is always more demand for new that old in everything and property even more so.

Location

Most developments are built in the best areas close to infrastructure and lifestyle.

Maintenance

New properties come with builder’s guarantees and warranties.

Management

Many new properties have onsite managers and tenants waiting to move into the property.

Vacancy Rates

Vacancy rates are very low in new properties as they are built in areas of high demand.

Rates and Water

Rates are payable on new properties but water consumption is payable by the tenant in new property.

NBN Internet

NBN is linked directly to the new property where established property has a central hub distributing the Internet.

Capital Growth and Equity

When you purchase a new property you will often find the pricing structure was set several years before completion often creating capital growth before settlement.

Value For Money

Often you will see established property that may soon require refurbishment priced higher than new property.

Body Corporate

Body Corporate fees are often lower on new property as facilities are being reduced and features designed to last longer and as the building is new there would be product warranties in place to reduce maintenance costs.

Rental Yield

Rental yields are higher on new properties from high demand.