There is no comparison between existing and new build property
One of the most common objections we hear about new build property is that it’s ‘overpriced’. It is a theory we hear most often from beginner investors – usually, those who have recently had a large dose of ‘Home under the Hammer’, or ‘Location, Location, Location’. They compare the cost of a pre-existing property to a new build and wonder why the new build is priced at such a premium.
In reality, comparing an existing home to a new build is like comparing a Robin Reliant to a Ferrari. Here are seven reasons why investors who buy new build or off-plan property won’t ever consider an existing property again.
1. Green and energy efficient makes new build more attractive
New build property benefits from the most up-to-date advances in green and clean. Energy efficient appliances reduce electricity bills. Modern window designs keep heat out in the summer and heat in during the winter. Walls benefit from better insulation and soundproofing than ever before. The next-door neighbours could be a street away.
All these things appeal to homeowners and tenants. The household costs are lower, daily living more comfortable, and their lifestyle more private. To give an existing home the same advantages would need a makeover costing perhaps tens of thousands of pounds.
2. Community living offers everything on the doorstep
New developments are built to create a ‘sense of place’. They’re meticulously planned to provide community benefits for residents. Many of the newest developments offer advantages either within the development or on the doorstep, which include:
- Open spaces
- Swimming pools
- Child-friendly play areas
- Boutique shopping and coffee shops
Some have door personnel, and residents benefit from state-of-the-art security measures that include gate-to-door video and CCTV.
3. Property customisation increases demand
When you buy an off-plan property, you could have options to choose finishes, appliances, fixtures and fittings. And, of course, when you buy off-plan property, you get a wider choice of units. Instead of buying the ‘worst house on the best street’ you could buy the best unit on the best development. And that will help create ongoing demand from tenants and home buyers. Whatever your investment objectives, that’s good news.
4. Lower maintenance and repair bills
The average maintenance and repair bill that landlords pay on an annual basis is more than £1,500, according to 2015 research by Platinum Property Partners. It covers basics like decoration, window and door maintenance, tradesperson’s fees, and repairs.
These are costs that investors in new build properties aren’t disadvantaged by. And any savings flow through to the profit line.
5. NHBC guarantees could lower insurance costs
When your off-plan investment property is completed, it will benefit from a warranty, such as the New House Building Council (NHBC) warranty. It confirms that the build meets required standards. It will be covered against defects for the period of the warranty (usually 10 years). With this warranty in place, buildings insurance premiums are often discounted by insurers.
6. New developments are often in prime locations
Developers want to build in the best locations. Local authorities are actively encouraging redevelopment of town and city centres. New build developments are taking place in locations that are being regenerated. They benefit from proximity to new transport hubs, shopping centres, cafes, bars and restaurants. Residents can leave their apartments and have just a short walk to their commuter train or evening entertainment.
Whether you’re targeting the silver renter for investment property profits or the growing millennial market, prime location off-plan residential investment property is proving to be a long-term profitable investment throughout the property and economic trend cycle.
7. Benefit from off-plan advantages
If you invest in off-plan property, you’ll benefit from all the above advantages of new build property. You’ll also benefit from the advantages of buying off-plan. These include:
- Discounts off the valued price
- First choice of property
- Staged payments to ease your financing
- A locked-in price, allowing you to benefit from any growth in property prices between purchase and completion
Lower costs and higher profits
As you can see, if you compare existing to new build, there is only one winner. When you invest in a new build property, you’ll benefit from lower maintenance bills. Based on the average landlord’s maintenance bill of around £1,500 per year, that’s like receiving an extra £125 per month in rent.
The lower energy bills, better amenities, and new technologically advanced appliances you could choose as part of the finish will make your investment property more rentable. You’re likely to benefit from higher demand from tenants, and that should mean higher rental rates and lower void periods.
To discover how you could benefit from investing in off-plan property in a new build development, contact one of our team today on +44 (0)207 923 6100. You’ll be joining hundreds of other investors who have invested in off-plan property with Gladfish and never looked back.
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