New vs Old For An Investment Property

When deciding between a new home and an old home for investment purposes, there are pros and cons to each. Here’s how they compare, and we are happy to discuss these with you at any time. 

New Home Investment

Benefits 

Higher Depreciation Benefits
New homes offer better tax deductions through depreciation, especially on fixtures, fittings, and construction costs. 

Lower Maintenance Costs
Everything is new, so there are fewer unexpected repairs, reducing out-of-pocket expenses. 

Attracts Tenants More Easily
Modern designs, energy-efficient features, and better amenities appeal to renters. 

Better Energy Efficiency
Lower running costs for tenants can make the property more attractive. 

Builder Warranties
Structural and appliance warranties help protect against defects and initial repair costs. 

Potential Downsides 

Higher Purchase Price
You often pay a premium for a brand-new property. 

Limited Value-Add Potential
Since it’s new, there’s less opportunity to increase value through renovations or improvements. 

Higher Holding Costs in Estates
If buying in a new estate, land appreciation may be slower due to high supply. 

Older Home Investment

Benefits 

Potential for Value-Add
Opportunity to renovate and increase rental yield and property value. 

Established Areas with Higher Demand
Older homes are often in well-located suburbs with strong long-term growth. 

More Land Component
Older homes generally come with larger land sizes, which appreciate more than buildings. 

Better Capital Growth Potential
Established suburbs typically have more predictable price increases. 

Potential Downsides 

Higher Maintenance Costs
Older properties often require more upkeep and repairs. 

Lower Depreciation Benefits
Tax benefits are reduced as the property ages. 

Outdated Features
May need renovations to meet modern tenant expectations. 

Which Is Better for Investment? 

• If you want higher tax benefits, lower maintenance, and strong rental appeal, a new home is the way to go. 

• If you prefer capital growth potential, established locations, and renovation opportunities, an old home might be better. 

It comes down to your investment strategy: 

• Cash flow-focused investors may prefer new homes for depreciation benefits and lower maintenance. 

• Growth-focused investors might opt for older homes in prime locations with value-add potential. 

Would you lean towards one over the other based on your investment goals? These are questions for your financial advisor, and we are happy to work with you and them to achieve your investment goals.