Many prospective investors and clients of ours often have hesitations towards off-plan and new build properties for the simple reason that they’re often more expensive than second hand houses or apartments. While this may be the case for many, sometimes people fail to take into consideration the numerous benefits that new build property investments provide.
In today’s article, I will be outlining some of the reasons why new build property can be worth paying a premium for and some of the benefits they provide over second-hand property.
Repair and maintenance
As I’ve mentioned, off-plan property can often come at a higher price than second hand deals. One of the reasons why this is the case is the higher quality of the build with newly constructed property. The facilities and equipment on-site will be a lot less liable to break or malfunction which will naturally lead to fewer maintenance issues with your property.
Second hand property on the other hand can be notorious for the constant upkeep that is costly and time-consuming for many property investors and Buy to Let landlords. The money that you sink into keeping your property fit for tenants can ultimately cancel out the reduced rate you paid for it in the first place. You may end up paying just as much or possibly more in the long-run for a second-hand property instead of a new build, so it may be more prudent to buy off-plan to avoid potential repairs and maintenance issues in the future.
Longer rates of tenancy
A happy tenant is a good tenant, and they will be happier with quality on-site facilities that cater to their every need. This is what new build properties offer, and this will keep your tenant happy with their living space and therefore more likely to stay on living there for several years.
This will keep your void periods to a minimum and ensure you will be earning a regular income over the long-term without needed to constantly repopulate your property.
Easier for first time buyers
For many first-time buyers a new build home is the only way they can get onto the property ladder. That’s because schemes such as Help-to-Buy and Shared Ownership are only available on the purchase of a new home.
A wider scope of financing will also be available on a new build property is also readily available subject to status. Up to 75% Loan to Value mortgages are commonplace, and with the excellent facilities that new builds offer, many first time investors see off-plan property as an excellent way of getting onto the property ladder via a deposit rather than shelling all of their money into a second hand property in a worse condition than a new build.
Wide range of warranties
Nearly every new build property will come with an NHBC warranty in place amongst others that will cover your property in the event that anything goes wrong with facilities breaking on-site.
Just like buying a sparkling clean, brand new car, there is an attraction to buying a new house that has never been lived in by anybody else. Furthermore, if you buy a new build off-plan, you will discover that many developers have a variety of internal fitting packages to choose from. You may be able to select floor tiling, carpets, kitchens and even white goods from a number of options that the developer can offer at competitive rates.
However, the range will not be unlimited, and you may find that owners of an older property have carried out high quality improvements to an older property that you absolutely love and would not even have contemplated.
Higher level of security
New homes come with higher levels of security. The majority of builders either pre-wire for a burglar alarm system or fit one as standard. These kinds of measures can help to bring down the cost of your buildings and contents insurance.
This will give your tenant peace of mind moving forward and keep them happy, which I’ve already alluded to be an especially important in keeping a sustainable rental income for several years.
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