Thursday, July 27, 2017

New build… 
or established home?

Adelaide is continuing to perform well in the current property market. The June quarter results are in, and Adelaide house prices have now increased over 11 consecutive quarters, with annual prices rising solidly by 6.6 percent. This is the highest annual rate since the June quarter in 2010... seven years ago!

So, if you are a property investor wanting to take advantage of the market, or a first time investment purchaser, you might ask, what are the common views on new builds versus established homes?

Here's what our team are finding:

New build

The positives: The property will be brand new. This is very attractive to tenants, particularly as all fittings and fixtures work well, and if not, the defect period will ensure that any faulty items are rectified in a timely manner. New homes, or those that are newly renovated, will present well to tenants. Modern kitchens, bathrooms and appliances are favourable. Plus, if you purchase a house and land package off the plan, you will only be required to pay stamp duty on the land portion only, which is a big bonus!

The concerns: Time to market will depend on when the building is complete. It is also difficult to get tenants through the property prior to completion, and landlords are usually only provided with floor plans or design booklets, making it difficult to start advertising the property early. Any unexpected delays will create additional downtime to the property, affecting your cash flow and returns. If you are one of many, especially in a unit complex or apartment building, where there are a high number of investors purchasing off the plan, making sure you have a strategy to map out the timing of your property to market is important. 

Established home

The positives: Speed to market. Typically the property will be in a condition to go straight to market, and therefore minimising downtime and earning you income right away. Character homes are especially popular with tenants.

The concerns: The age of the property will determine its maintenance profile. It is important to find out how old the services are to the property, for example, air conditioning systems or hot water units. Keep in mind; if the current owner has been living in the property, 
the chances are that regular maintenance has been completed, as opposed to the property being rented out for many years. 

There is a saying that 'a confused mind stalls', so if you want to make the most of Adelaide's current market conditions, our Property Management team is here to help. Our team can share with you what they are finding in the field, and give you inside knowledge on what homes are the most popular, and in what suburbs.

No comments: