Second-hand Property Strategy

One of the biggest advantages of old properties is the fact that you get less price fluctuation than new properties in the same area.

 

Active property strategy is required

You can gain the ability to add instant value through renovations, subdivision and development. Some investors have even managed to get their property for ‘free’ by subdividing a large block and selling off a portion of the land.

It has been proven that land and scarcity of it is what drives property value upwards, and older properties generally have a bigger land component.

 

High maintenance cost for older properties

High maintenance costs are probably the biggest disadvantage of old properties. There may be a loss of rental income if there are renovations needed to be done. It may be also harder to attract good quality tenants to an old property unless it has had some renovations done to it to modernise it.

Your property will experience decreases in rental income over time as the property gets older in comparison to other properties in the location.

 

Tenants may not be attracted to older properties

Tenants are more attracted to newer properties at the same price point.

Tax benefits are not as good with older properties due to lower depreciation values.