New vs. Old Properties Strategy

New Properties

Advantages:

• Higher tax benefit
• No maintenance
• Better tenant appeal due to new design, technology, etc.
• Easy to rent if the asking rent is not too high

Disadvantages:

• Lower capital growth in comparison to established properties in the same area for a few years
• Higher purchase price due to premium for being new
• Usually get hit first if the market slows
• Very little room to add value
• Price set by developers may be artificial or heavily influenced by organised marketing effort

Old Properties

Advantages:

• Purchase price usually set by individual vendor without commercial manipulation
• More solid growth than new properties due to heavier 'land content' component
• Less price fluctuation than new properties in the same area
• Potential to add value

Disadvantages:

• Higher maintenance
• Not as appealing to tenants
• Future requirement for renovation
• Lower than usual rent if the property is too run down