Hi Property Lovers
I came across this article on Australian Property Investor and thought id post it up as its a good read and gives some real good information.
There are three key factors to consider when deciding whether to buy new apartments or older units for investment, according to Laing+Simmons general manager Leanne Pilkington.
The main considerations, Pilkington says, are the investor's individual circumstances, the location of the property and what the investor wants from their investment.
"As with so many property decisions, the location is paramount," Pilkington explains.
"Properties in established suburbs with good transport links and convenient access to shopping facilities, hospitals, universities and schools tend to be more attractive to tenants than outer-lying suburbs, regional and rural areas."
"Older-style units in these locations can prove to be good investments, provided there's not a wave of new development happening or slated for the area."
Pilkington says areas with low levels of residential development activity and little space for new projects provide good investment opportunities for older apartments.
"Purchasing an older unit in a well-located suburb with little or no development planned in the future should mean that you will not only be able to attract tenants but also realise capital growth over the long term."
"On the other hand, if there are new development projects in the area, an older unit may not appreciate in value. This is where the purchase of a new apartment may be a more prudent investment."
"New stock affects the fundamentals of supply and demand in a given area, which in turn affects an investment's ability to attract tenants and the rental returns it achieves."
She adds, "Ultimately, it depends on what the investor is looking for from their investment".
"If you're after a steady, predictable, recurring income stream then an older unit in an established suburb might be the best option. The main concern will be maintenance costs to keep the property to a suitable standard to attract tenants."
"Otherwise, if it's a long-term investment with a view to realising capital growth then purchasing a new unit makes sense."
This information was gathered from:
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