Old Build versus New Build and Off Plan Property, Part 1: Cost

There are pros and cons involved in buying any type of property, but in this mini series, we’re going to explore the positives and negatives of three key types of properties – old build homes, new build and off plan properties.  Investors are faced with many dilemmas and opportunities when it comes to investing in property so in this mini series we will detail some key facts to help you make the right investment choices for you.

To start things off, we’re going to begin by looking at the issue of cost, something that’s a major factor in the purchase of properties for many investors.

Old Build

Pros – With old build properties, one of the major attractions is that there’s often more bargaining power available in terms of cost, especially in the current economic climate. In the case of below market value (BMV) properties in particular, it’s possible to pick up some great property investment bargains. Older properties also tend to be bigger in size, so you get better value for money.

Cons – You do have to know where to look to get the best bargains. There will always be some old build homes in desirable locations that hold their value and can’t be bought for a good deal. Some older properties will have suffered a lot of wear and tear, or may need updating. If it takes time, then you could lose valuable time and money before you can get a tenant in.

New Build

Pros – If you’re purchasing a new build property, it’s brand new and you won’t need to spend money on doing it up for rental. Plus, extra incentives are also often available, such as brand new appliances or the chance to choose how the interior is decorated, which can all help with your costs.

Cons – When you buy a brand new property, you’re often paying above the odds for it. Also, if you’re going to use it for rental purposes, you need to be able to make a decent profit from renting it out, especially if you’ve got mortgage payments to cover.

Off Plan Property

Pros – The cost of off plan properties is often a major selling point. As they’re being sold off-plan, as opposed to newly built, the cost can be considerably lower, which attracts some buyers.

Cons – Sadly, the low price can sometimes turn out to be too good to be true. For example, it may be a reflection on the fact that the properties on the development aren’t selling, which could mean that it will take ages for it all to be finished. There’s no fun for anyone, even tenants, to live on a building site.