- Benefits of Buying New
Buying new gives an investor the benefit of buying before it’s on the market. The time between the launch of a development and completion can afford investors additional time to source funds for the purchase.
Generally, an investor will buy at a price lower than the market because markets move. Even though off the plan apartments have a set price, vendors may still be open to negotiation, especially early in the selling period.
Investing in the early stages of a new property could be the difference between getting an extra few percent growth over the duration of the ownership, to not getting that growth at all.
Properties generally depreciate for 40 years from their construction date. Investors are entitled to claim depreciation for the full 40 years as long as they own the property.
On an old property, an investor can still claim depreciation on the building structure itself but they can’t claim on the fittings or fixtures.
As that rent increases, it takes the place of the claimable depreciation, and it makes the investment more affordable.
- Negative Gearing
Negative gearing enables you to borrow to buy an investment, and means the interest and rental expenses to maintain the property exceed the rental income.
The cash losses in the early years will usually be compensated by good capital growth in the value of the investment. Furthermore, the property grows in value, giving you more equity to utilize for future property purchases, growing your property portfolio over time.
By the end of the book, you will know.
- Key benefits of buying a new property
- How to minimize risk when buying new property
- How depreciation will impact your property investment
- What negative gearing is
- Whether an old or new property investment is best of for you