5 Reasons to Invest in Brand New Apartments
Apartments make a great investment. When it comes to investing, to be a successful investor relies less on emotions and more on the hard figures. So let’s look at why adding new apartments to your portfolio is something to consider.
1) Low Maintenance
Older properties will not only be worn-in but they’ll also be worn-down. However, newer ones, by comparison, are cheaper to maintain since everything from the windows to the kitchen sink are new.
Also, with newer technology installed, it will be much more energy efficient, so your tenants will appreciate the lower power bill as well as less interruptions in the form of fixing old appliances and fixtures.
All new apartments have to abide by the updated safety legislation, meaning safer in terms of personal safety and health. So you can be sure that things like the fire safety legislation was in mind during the planning stage and devices such as fire alarms will be new and up to date ensuring you have peace of mind, knowing your investment is practically fire-proof.
Also, new apartments have key card access, keeping your tenants safe from intruders and those pesky door-to-door sales people.
3) Statutory Protection from Builder
Work in Qld over $3,300 generally requires the builder to have home warranty insurance. This is definitely the case for new apartments also. In the event that there are any major defects, your investment will be covered under warranty.
The QBCC (The Queensland Building and Construction Commission) will pay out the claim and then pursue the builder.
4) Location, Location, Location
Your tenants will want the world - nearby schools, cafes, supermarkets, parks, gyms , and access to it via public transport and main roads and highways as well. Astute developers tend to locate their apartments close to these amenities because they know what the market wants.
Reliable tenants are what you want and, if for any reason they have to leave, a steady stream of renters with their wallets open waiting to move in will reduce your holding costs.
With the changes in federal budget changes from 1 July, 2017, investors of brand new property will have more advantages than investors of pre-loved property.
Investors who buy brand new properties will be able to claim depreciation on appliances since those will also be brand new as opposed to those who buy already established property.
According to Tyron Hyde of quantity surveying firm Washington Brown, investors of an $800,000 property bought new, would be able to claim around $110,000 over ten years.
Whereas investors of an $800,000 property established 20 years ago in 1997 would be able to claim around $61,000 over 10 years.
An investor of a similar priced property established 30 years ago in 1987, would be able to claim $0 over the next 10 years.
As you can see, there are definitely more tax incentives to purchase new.
5) They're New
Tenants prefer renting new than old. And did I mention that you may be able to charge higher rents too? This is owing to the fact that the more demand for new there is, the higher you will be able to rent out your apartment.
To recap, here's why you want to buy new:
- Low Maintenance
- Statutory Protection from Builder
- Location, Location, Location
- They're New
So buying new apartments as we can see is better for the bottom dollar and better for your overall investment strategy whether it be buy and hold for capital gains, rental income or to sell at some future date.