Buyers looking to invest in residential property are faced with the decision of investing in a new home or buying one that has already been lived in. It is important to make an informed decision, says Pieter Piek of Just Property Invest, who adds there are many benefits to buying a brand new property.
For example, purchasing an investment property straight from the developer has significant financial advantages in that you avoid paying transfer duty on the property and transaction costs are paid by the developer.
VAT will typically be included in the price and there will be a lower deposit required initially, with the remainder being due on completion. Another pro is you are buying a brand-new property that comes with guarantees of between three and nine months on all fittings.
The National Home Builders Registration Council will cover the structure for five years, says Piek. “This means you will have warranty protection against defects in new homes, among other benefits.”
Furthermore, a new property will not require as much maintenance as an older one, especially in the first few years. Everything will be new, so investors will be spared worrying about old fittings breaking or having to fix wear and tear for tenants.
Piek advises: “Look for a new development where you will have peace of mind and where the investment consultant has negotiated an investment package where you have levies included and sometimes even a rental guarantee.”
Buying from an established developer means that you can check their track record. One of the downsides is that you will probably buy a unit off plan, which means you won’t be able to see the finished product before purchasing.