Cam McLellan & Allister Lewison discuss the pros and cons of buying new versus established properties for investment purposes. The key takeaways include:
Why People Prefer Established Properties
- Visual Appeal – Buyers are drawn to what they can see, such as a well-maintained house with a nice garden.
- Emotional Connection – Buyers feel comfortable with the ability to physically inspect and envision themselves in the home.
- Fear of Construction Issues – Concerns about builder reliability, project delays, and unexpected costs deter some buyers from choosing new builds.
Why New Builds Are a Better Investment
- Lower Maintenance Costs – New homes require fewer repairs, whereas older homes often have unexpected expenses within months of purchase.
- Higher Rental Yield – New properties tend to attract tenants faster and command higher rental income.
- Stamp Duty Savings – Buyers only pay stamp duty on the land value, making upfront costs lower.
- Depreciation Benefits – Tax advantages from depreciating fixtures and fittings help investors reduce taxable income and offset holding costs.
- Cash Flow Control – With new builds, costs are more predictable, reducing financial strain on investors.
Avoiding Overcapitalisation
- Investors should avoid building excessively large homes that won’t yield proportional increases in rent or resale value.
- The optimal property size and design for a given area is crucial for maximising returns.
- OpenCorp applies data-driven methods to ensure clients don’t overspend on unnecessary features.
Lessons from Experience
- Cam shares a personal anecdote about a past investment mistake involving a poorly planned development that led to unnecessary expenses.
- Learning from such experiences has allowed OpenCorp to refine their investment strategies, ensuring clients make smarter financial decisions.
Facebook: http://www.facebook.com/opencorp
Twitter: @OpenCorp_au
LinkedIn: https://www.linkedin.com/company/opencorp-au
Instagram: @OpenCorp
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