There are many types of property investment you can choose. However, there are basically two types you should know. They are brand new and established properties. However, it is quite hard to decide which one is better than the other because both have pros and cons.
There are various factors of both investment properties that can influence your decision making.
The best way to decide which property investment for you is to see the pros and cons thoroughly and consider them based on your financial circumstances, interest, portfolio, and strategy.
Choosing the best property investment
To know which property investment fits you the best, you need to find out more about property investing.
You need to find out risk, pros, cons, weigh, and everything related to this business. Only then, you can choose which one of them that fits your circumstances.
To help you have insight of property investment, here are pros and cons of both brand new and existing properties:
- The pros of buying brand new properties is that you have benefits of depreciation. You will get the best depreciation return since the rules tells you so. Another pros of having new properties is demand of market especially for young tenants. New properties equipped with high-tech gadgets are more popular and attracted to young generations. In addition, new properties don’t need much repairs or maintenance especially since it still has the builder’s warranty.
- The pros of established or existing properties is there is no limit to location. Another benefit of buying existing properties is the lower price compared to the brand new one. It means, you are able to buy under market value. In return, you get instant equity. You can add the value of the property using your way. Making some improvements to the property will boost the value.
- The cons of buying brand new properties is the premium price. Thus, it is sometimes not affordable for young and new investors who just started investing. In addition, sometimes the incentive and special offers informed by the developers are not as good as the initial look. Another cons of brand new properties is the location that can often be compromised. Next pros is the quality of the property itself. Sometimes, it comes second to profit.
- Meanwhile, there are also cons of established property investment such as hidden flaws of the property. If you fail to identify the costly flaws, it can cause you headache in the future because you will need to spend much money to repair. Another cons is renovation budget can overshadow the profit. You may also need to go for development plan in order to add value to the property. During this process, you may encounter another problem. Next cons is related to the benefits of depreciation. Unlike brand new property, established property’s depreciation benefit is now less than it used to be. So, there are both pros and cons for brand new and established property investments. Choosing the one that fits you is the right thing to do.