Advantages of building an investment property
It might not seem like the most obvious choice, but there are lots of benefits to building an investment property instead of buying an existing property.
Just think about it. A brand-new home, shiny and clean, with modern spaces and modern fittings that is suitable for modern families has loads of tenant appeal.
With television shows and advertisements working overtime for you promoting the ideal modern home, it’s more than likely you’ll be able to charge premium rent if you’ve built the right home in the right area.
Media rooms, master bedrooms with ensuites and walk-in-wardrobes, outdoor entertaining areas, multiple living rooms, open-plan designs, kitchens with modern appliances, trendy materials and modern colour schemes are all standard in new homes and all in demand.
What is a turnkey package for a house?
Building a new home can be a lot easier than investors might think, especially when it comes to buying a turnkey house-and-land package.
In many ways, this is the most attractive option for investors who don’t want to waste time and money on every little detail. A turnkey package means the house is completed for the investor, and tenant, so all you need to do is “turn the key” and move in.
It includes everything you often hear has been excluded in newly-built homes such as floor coverings, a driveway, landscaping, fencing, blinds, flyscreens and the letterbox.
Often these are excluded so home owners can save money and do it themselves or hire third parties to suit their individual needs. For investors, it’s not personal, so you’ll be able to make decisions based on what’s going to suit the broader market.
Benefits of building your own investment property
One of the best things about building instead of buying an investment property is that you save on stamp duty and can claim depreciation benefits on the building, contents and all internal fixtures and fittings because they’re all brand new.
Normally you would need to pay stamp duty on both the house and land, but when a property is newly built you only need to pay stamp duty on the land. This alone is a saving worth thousands. The ability to claim depreciation on internal fixtures and fittings also means you can potentially turn a negatively-geared property into a positively-geared property after tax.
Other general benefits to building an investment property include low vacancy rates, better resale value and few to no maintenance costs as everything is under warranty.
Of course you will need to consider all the usual things when it comes to buying an investment property including taking time to understand the market, working out your costs and choosing the right property manager.
There are many different ways to invest in property. Whether you’re buying your very first investment property or diversifying your property portfolio, building an investment property can be a smart and surprisingly simple way to strengthen your portfolio. Don’t rule building out. It might just deliver the perfect investment property for you.