The main question that seems to come up when someone gets ready to build a new investment property is whether or not it is better to invest in a brand new home or an older place. Unfortunately, there is no golden answer. Each one of these options has advantages and disadvantages. We’re going to be discussing some of those options so that you can hopefully narrow down your choice!
Why To Buy New
Everything In The Home Is New
Appliances and construction features have come a long way, even in the past few decades. There are many modern characteristics of homes that are extremely popular at this point, including open-floor plans, granite counters, high-tech electrical systems, and stainless steel appliances. If you buy old, you’ll likely have to upgrade these things to help sell that home to the large majority of buyers.
Less Of An Introductory Cost For Upgrades
With older homes, you typically need to account for renovation costs so that the home is livable. You’ll have to take more time to fix those necessary items, which may mean hiring third-party contractors to do work. Not only does this require a lot of effort, it also requires you putting trust in others with the property that you just purchased.
Increased Energy Savings
Thanks to modern systems, newer homes tend to be far more energy-efficient than newer homes. You can save a massive amount of money if you end up paying for it yourself or you can use it as an incentive when trying to entice renters.
Why To Buy Old
While newer homes might be more “comfortable” and “clean” for the modern family, they often lack the character that you find in older homes. Think of the gorgeous crown molding, casement windows, Spanish tile, and wood panelling, that you’ve likely seen in older properties. These characteristics give you a huge selling point.
Low Purchasing Cost
While you may have to spend some money on maintenance and upgrades, you might still end up paying far less than you would with a new home. Many buyers can find old homes in the same range as new homes for initial costs more than 20% lower. You’ll also have a better ability to get a lower price on the home, as it is easier to make deals with current homeowners vs. developers.
Better Location Choices
Many great neighborhoods in prime locations have already been completely developed, meaning housing developers often have to look in less desirable areas to build. This means that you might not be able to find a new home in a popular district or local hotspot. Location is one of the biggest deciding factors in home-buying, meaning you may have an easier time selling, even if you get a house that is more run down in an attractive neighborhood. Just think of the million-dollar shacks that line the streets of San Francisco.
Hopefully this article has helped to narrow down your decision as you look for a new investment property. Each choice has its own pros and cons, so it’s up to you to decide which path you want to take and how much work you want to put in or money you want to save.
Have you ever purchased a new or old property before? What was your experience like? Let us know in the comments!