There are several benefits of purchasing new houses in Sydney as opposed to current dwellings. Several of these benefits aren’t so obvious to newer investors. This may explain why often the more experienced make it appear simple and effortless in building larger portfolios of positive flow of cash and they also enjoy larger net returns.
Firstly, tenants prefer clearly the new home feel, and often are willing to pay more in terms of rent for some new home they can live in, complete with latest materials like new aluminum window together with new bi-fold doors and design elements. This implies being capable of attracting better quality tenants. The owner’s builder enjoys maximum occupancy plus lower turnover rates. They also receive the maximum possible rent.
Well- constructed new homes provide you also with the confidence that you’re not going to run into some massive unforeseen repair bills, or replacement expenses for your major appliances.
These are items which people purchasing existing properties often find out catch them off-guard, and turn the property’s positive cash flow into one with much negative cash flow. Obviously majority of the newly built properties plus those reserved off plan carry many years of Builders Warranty insurance, against major issues while at the same time providing a massive amount of peace of mind. This is something which an existing property doesn’t offer.
This all leads to lower maintenance costs and simplified management that may increase further profit margins and remove all the stress of constant maintenances and repairs calls from tenants.
But perhaps the most overlooked benefit of purchasing a newly built home is being capable of maximizing depreciation, and enjoying majority of tax benefits that may make all the difference in true returns while the home is held.
House and Land
Investing in property through house plus land packages come with several benefits. These benefits include:
Owning the land Affordability Future value growth, since land is limited all the benefits of acquiring a brand new house Instant equity upon its completion
How the contract and loan process operate
The property and land packages include two contracts. The first one is meant for the land’s initial acquisition while the second one is for the actual construction of the property.
The most widespread form for financing house plus land packages is getting pre-approved for financing that allows you an initial draw down to fund the acquisition of land together with installment payments, which is released to your builder and they complete several milestones in the construction process.
A typical construction project involves between three and six stages, or draws to fund the construction. Here the advantage is building equity on the whole purchase, while paying only interest on the portion any type of funds presently being used. Also there are extra loan alternatives offering increased flexibility, which include interest only construction loans.
The period it takes to build
Generally the actual build of a new house takes about 140 to 180 days from the initial site works. This approximately takes three weeks after the land is finally settled. The whole process, from contract to completion may run between 6 and 9 months.