If you’re thinking of investing in property, you may be wondering whether to buy a new build or an existing property. Both have their pros and cons, so it’s important to weigh up all the factors before making a decision. On the plus side, new builds are often more energy-efficient than older properties, as they must meet current building regulations. This can mean lower running costs and potentially higher resale value. On the downside, new build properties can be more expensive than older properties, as you’re effectively paying for the premium of a brand-new home. Existing properties, on the other hand, may need some updating to bring them up to scratch, but they can offer more space for your money.
This article will explore the key differences between investing in a new build or an existing property, to help you make the best decision for your needs.
Why You Should Buy An Existing Building
1. It’s Usually Cheaper
The purchase price of an existing building is typically lower than that of new development. This is because developers incur significant costs in acquiring the land, obtaining planning approval, and constructing the building. These costs are then passed on to buyers in the form of a higher purchase price for new developments. There are many cheap and good-quality properties that you can purchase if you’re looking to invest in properties. For instance, do you know you can purchase a home in Singapore at a very cheap price if you know where to look? The market is filled with good quality and cheap properties. In contrast to new developments where the costs of land and construction are passed on to buyers, resulting in a higher purchase price.
2. It’s easier to get a mortgage
Mortgage lenders tend to be more willing to finance the purchase of an existing building than new development. This is because they can assess the value of the property more accurately and are therefore less likely to lend more than the property is worth. The purchase of a new development is often seen as more of a risk by mortgage lenders, as the value of the property may not be fully realized until it is completed.
3. You can move in straight away
With an existing building, you can usually move in immediately after purchase. This is not always the case with new developments, as they may not be completed until some time after purchase. This can often be a significant delay, particularly if the development is in the early stages of construction.
4. You know what you’re getting
With an existing building, what you see is what you get. There are no surprises when it comes to the finished product. With the new development, however, there is always the possibility that the finished product may not meet your expectations. This is because there can be significant changes made during the construction process, which may not be apparent until the development is completed.
5. It’s easier to negotiate
With an existing building, you can usually negotiate a lower purchase price than the asking price. This is because the seller is usually more motivated to sell and may be willing to accept a lower offer. With the new development, however, the purchase price is often set in stone and is not negotiable.
Why You Should Build A New Property
1. The Location
When you build a new home, you can choose the location of your property. This is important because the location will affect the resale value of your home and how easy it is to find renters. If you’re looking for a long-term investment, you should choose a location that is growing in population and has a strong economy. This will give you the best chance of seeing an increase in your home’s value over time.
2. Lower Maintenance Costs
A brand new home will have fewer maintenance issues than an existing home. Over time, homes start to show their age and require more repairs. By choosing to build a new property, you can avoid many of the common repair costs that come with owning an older home.
When you buy a new home, it will likely come with some type of warranty from the builder. This means that if anything goes wrong with the property within a certain period of time, the builder will be responsible for fixing it. On the other hand, if you purchase an existing home, any repairs that need to be made will be your responsibility.
4. Energy Efficiency
New homes are built with energy efficiency in mind. This means that they are designed to use less energy than older homes. As a result, you can expect to see lower energy bills when you live in a new home. Additionally, newer homes are more likely to have features like solar panels and energy-efficient appliances, which can further reduce your monthly expenses.
When you build a new home, you have the opportunity to customize it to your specific needs and taste. If you want a certain type of flooring or layout, you can work with the builder to make sure your new home has exactly what you’re looking for. When you buy an existing home, on the other hand, you’re usually stuck with whatever features the previous owner decided on.
It really depends on your own personal circumstances as to whether you should invest in a new property or an existing build. However, as a general rule of thumb, investing in a new property is usually the wiser choice. Not only will you be getting a brand-new home that is likely to appreciate in value over time, but you will also avoid many of the potential problems that come with older homes. Of course, investing in a new home is not without its own risks – particularly if you are buying off-plan – but as long as you do your research and purchase sensibly, you should be a winner.