If you’re an investor, the right investment property is essential. So, why not build one and reap the extra rewards?
An investment property is a fantastic way to boost your long-term financial security.
However, the secret to success as a landlord is making sure you have the best dwelling for your investment strategy.
Undoubtedly, one of the biggest decisions you’ll face on the property investing journey is whether to buy new or established?
We took a look at why some investors choose to build rather than buy.
1. Tax benefits
New homes have a significant advantage when it comes to tax time.
“It depends on the exact situation, but newer builds typically offer significantly higher depreciation,” says Anne Flaherty, realestate.com.au economist.
In addition, investors can also claim tax deductions for the cost of construction, new fittings and fixtures like curtains, blinds, floor coverings and appliances.
So, come the end of the financial year, with the right accountant and a brand new rental, you’ll likely have a healthy-looking tax return.
Depreciation is a major consideration for investors. Picture: Keir Construction
2. Higher rents
We all know that new home feeling — it’s alluring to homeowners and tenants alike.
“People like to live in a new property because it’s newer and shinier,” Flaherty says.
“Often, new homes have things like heating and cooling.
“Because of this, from an investor perspective, a new build will generally command higher rent on average than an existing property.”
3. Location
When buying a property with hopes of renting it out, location is key.
Coastal locations are ‘hotspots’ right now with tenants prioritising lifestyle, says Luke Cini, sales manager at Brighton Homes
“These areas really appeal to families who tend to want to stay in a property for a few years,” Cini says.
If you’re building in coastal areas, there’s also typically more opportunity for capital growth — especially if you get in early by buying into a new community, he adds.
There’s amazing coastal locations to build all around Queensland. Picture: Stockland Newport
Inner urban neighbourhoods close to universities or employment hubs are also in demand, Cini says.
“You can get an unbelievable rental return by building in some of these other areas.
“The rents are sometimes higher because you might have multiple people living in a property rather than a family.”
Of course, in the end, the location you choose will depend on your investment strategy.
Still, Melissa Baillie, Stockland Sales Manager, says you’ll have no problems finding a new home in a desirable area with many Queensland Stockland communities in a range of in-demand locations.
4. Warranty and maintenance
Another great reason to buy new is “peace of mind”, says Baillie.
“Investors have the benefit of not having maintenance in the short term because everything is brand new,” she says.
“You’re also not going to settle and then a week later get the roof replaced or something along those lines.
“But you have the security of knowing that if something goes wrong, there is the warranty period, so you’re covered.”
Choose a developer and builder you can trust. Picture: Monster Homes
5. Quality properties
Buying an older home can be a gamble. You don’t know who built it, whether the builder was trustworthy and if quality materials were used.
Baillie says the best part of buying new is that you choose the developer and builder yourself.
This means you do your own research and can choose a reliable industry player.
She adds that Stockland strives to take the stress out of the whole investment property journey by using Stockland’s team, which is well versed at streamlining the process and offering up rent-ready homes to potential new landlords.
“All of our house and land packages include everything you need to have the house finished, from all the inclusions to landscaping.
“It’s relatively easy and the benefit is that you’re able to create something that’s what you want and is ideal for you as an investor.”
If building sounds like the right path to start your investment portfolio, you can find out more about Stockland’s Queensland communities.
This article was originally published on 1 Sep 2022 at 2:46pm but has been regularly updated to keep the information current.