5 Things to Consider When Investing in a New Build Property in Australia

If you are an investor, the right investment property is essential. So, why not build and reap more profits?

Investing in investment real estate is a great way to secure and grow your long-term finances.

However, the secret to success as a homeowner is ensuring you have the best accommodation for your investment strategy.

Without a doubt, one of the biggest decisions you will face in your real estate investing journey is whether to buy new or build new?

We’ve looked at why some investors choose to build rather than buy.

1. Tax Benefits

New homes have a significant advantage come tax time.

“It depends on the exact situation, but newer builds often offer significantly higher depreciation,” says realestate.com.au economist Anne Flaherty.

Additionally, investors can also claim tax deductions for construction costs, new fittings and fixtures such as curtains, blinds, floor coverings and appliances.

So by the end of the financial year, with proper accounting and a brand new lease, you’ll probably have a nice tax return.

2. Higher Rent

We all know that new home feeling – it’s very appealing to homeowners and renters.

“People like to live in a new property because it’s newer and brighter,” Flaherty says.

“Typically, new homes have things like heating and cooling.

“Because of this, from an investor perspective, a new building will generally have higher rents on average than existing properties.”

3. Location

When buying a property with the hope of renting it out, location is key.

Luke Cini, sales director at Brighton Homes, said coastal locations are currently ‘hot spots’ with tenants prioritizing lifestyle.

“These areas really attract families who tend to want to stay in a property for several years,” Cini says.

If you’re building in coastal areas, there are also often more opportunities to raise capital — especially if you get in early by buying into a new community, he adds.

Cini says inner-city neighborhoods near universities or job centers are also in demand.

“You can get unbelievable rental returns by building in some of these other areas.

“Rents are sometimes higher because you can have more people living in a property than a family.”

Of course, ultimately, the location you choose will depend on your investment strategy.

However, Melissa Baillie, Stockland Sales Director, says you should have no trouble finding a new home in a desirable area with many in-demand locations.

4. Warranty and Maintenance

Baillie says another great reason to buy new is “peace of mind”.

“Investors benefit from no short-term maintenance because everything is brand new,” she said.

“You’re also going to be unsettled and then a week later have to replace the roof or something along those lines.

“But you have the security of knowing that if something goes wrong, the warranty period is still there, because you’re covered.”

5. Quality Calculation

Buying an older home can be a gamble. You don’t know who built it, whether the builder is trustworthy, and whether quality materials were used.

Baillie says the best part of buying new is choosing your own contractor and builder.

This means you do your own research and can choose a company that is trustworthy in the industry.

If construction seems like the right way to start your portfolio, then you can.