Old Versus New by David Kerr

If there's one topic property investors rarely agree on, it's what makes a better investment: old or new?
Proponents of buying 'old' argue that established dwellings are typically more affordable and can be renovated to create equity, whereas those buying 'new' argue that this is outperformed by the tax incentives that new properties deliver.

Confused? Here are the arguments for both sides of debate, but remember there is no right or wrong answer, regardless of which corner you stand on! Old and new properties both have distinct, unique advantages and what counts as an investor is that your decision matches your individual strategy and goals.

Reasons to buy New
1. Tax Depreciation
If you're an investor, one of the big advantages of buying a newly constructed property is that you can claim depreciation as a tax-deductible expense. This includes the depreciation assets in the buildings and the cost of the building itself, as well as wear and tear on fixtures and fittings in the property. The newer the property, the higher level of depreciation.

2. Better Quality Tenant
Brand new properties tend to attract a better quality tenant, which means a higher rental income and fewer headaches for the landlord!

3. Less Maintenance
Unlike new homes that require little maintenance, owners of second hand properties are often faced with immediate maintenance issues. The cost of repair in older homes can significantly inflate ongoing expenses.

4. Warranty
As a purchaser of a new property you are protected for a number of years against major building defects by home warranty insurance, which all builders of new homes in Australia are required to carry.

Reasons to buy Old
1. Equity
There is little opportunity to add value to a new home, whereas the investment made in an old home can grow in the future should you choose to renovate or extend.

2. Affordable
It's often said that you get more house for less dollars buying a secondhand home than when buying a new one. For entry level investors, old properties can have the advantage of an affordable price tag.

3. Unique Appeal
Older homes often have great features that can't be replicated in new homes. A well maintained period - style home, for example, will reap rewards in capital growth down the track.

4. Established Sales History
There's little guesswork in buying an established property because you'll be able to trace back the property's appreciation and find out how the suburb has preformed. This can help give you the assurance you need that you're buying a good property.