In the world of real estate, the big question about investing in an old or new property has always been a big debate for the buyers who are looking for a perfect abode to settle down. Some buyers may get attracted towards the charm and stability of an old house whilst some may yearn for modern amenities of a new house.
When you plan to buy a house you have to consider a number of factors such as location, price, financial procedures, maintenance cost and customization. So it is difficult to say which investment is the best as every property is different.
To make things easier for you, our experts at the commercial real estate in Corpus Christi have compiled an overview of different factors that one should look out when navigating the old house/new house debate.
What are the benefits of investing in an old property?
An old house is designed with a sense of historic tradition and has a unique charm that new properties may take years to recreate. Since the old homes were built when the land was cheaper they come with wider hallways, larger yard space with ample parking. Some older homes may even exhibit distinct architectural assets like decorative pillars, exposed brickwork with thicker walls and even a secret staircase that makes it an exciting deal to attract both the potential renters and buyers.
Old houses are usually available in the central town side with the established neighborhood. Local amenities such as shops, restaurants, parks and public transportation are all available at a walkable distance. For investors, an older townhouse in an exclusive area will fetch higher prices than a fancy new property located in an underdeveloped community. This means that you will have a precise idea of what your property will be worth in the future on the basis of compiled data.
Older properties for sale are considerably more affordable than a new one in the same area. Depending upon the states, resale homes may also have a lower property tax. The prices are negotiable and you do not have to pay extra cost for amenities, as and when you buy a new house. Older homes can be easily renovated to match the current style of designing as per the owner’s taste and budget. Few inexpensive renovations like plastering or changing the color scheme can make the older property look as attractive as a new one, thus improving its rental value.
What are the drawbacks of investing in an old property?
Old homes may require repairs that may add to your cost in the long run. Hot water heaters may need replacement or a leaky pipe may require fixing. If the property has a major structural issue, it could cost a lot to get it fixed which may not prove a worthy investment.
In short, though old homes are cheaper you end up paying in long run in terms of repairs. And if you are planning to buy an older property for renting purpose you have to be prepared to sort out all the wear and tear issues that your tenant may ask you to take care of.
Financing and insurance:
Financing could be tricky and difficult in case of an old house. Getting a loan from banks and lenders on an old mortgage is difficult as compared to the new one. Insurance on older homes is typically more expensive and depending on the location and condition of the house securing insurance becomes difficult.
Fewer amenities and energy efficiency:
The old house has fewer amenities and older appliances. Older homes are less energy efficient as they are not equipped with solar panels, low energy appliances and insulated walls. This can lead to higher monthly expenditures.
Now let’s look at the benefits and drawbacks of buying a new house
What are the Benefits of investing in a new property?
More returns on investment:
For investors buying a new house is no doubt a better choice as they can earn income from day one. Tenants are more attracted to new construction as it is well equipped with modern amenities. Also, you do not have the hassle of checking for repairs or replacement. New houses come along with many luxuries such as granite counter, open floor concept, built-in dishwashers, media rooms and network wiring. Thus renters do not hesitate to pay higher rents for these facilities.
Less Maintenance cost:
Since the house is new it is well furnished with all new equipments that come under warranty period. This will cut on all the additional cost related to repair and maintenance, which makes a new home worry-free for several years.
New homes are built with more environment concern in mind. The new house comes with energy certification covering walls, roofs, windows, doors and even appliance package. They are built with newer building material, better insulation, solar panels and state of art technologies. This will save on your utility cost.
If you require shifting your base in a hurry, the new house is a better choice. Unlike the old house, you need to wait until the previous owner or renter vacates it. Unless the new house is still under development, you can accommodate the very day you sign the deal. Also, you need not wait for any repairs to be done.
Easy finance and insurance:
It is often easier to get a mortgage when buying a house in a new structure. Also, you need not get involved in the tedious process of mortgage like document verification and registration as the developers themselves look after the completion of the mortgage process. Many a time the developer has an in-house financing department which eases the mortgage process and excludes extra party cost.
Another big advantage is that homeowners insurance less expensive in case of a new house since all accessories and equipment installed are new and according to the current standard.
You can renovate the new house according to your whims and fancies, unlike the old one which is designed according to the taste of the previous owner. Buyers can choose from personalized wall colors, room layouts and other add-ons to build their dream house to settle in.
What are the drawbacks of investing in a new property?
There is a sizable gap between the prices of a new build as compared to an old one. New build houses on an average cost more as you not only pay per square foot but you also have to pay for all modern amenities. Sometimes you also end up paying for facilities of which you are in no need.
New developments are usually located on the outskirts of established town where bare lands are easily available. Thus new houses are far away from business centers, malls, schools, markets etc. resulting in longer commute time. The downside of this factor is that it may get difficult to rent or sell in future. Also, an oversupply of similar properties in the neighborhood may also result in the low rental price.
New construction may face delay in completion due to unexpected climatic conditions. These delays are common and more frustrating when you have sold your existing home and you have to rent an apartment until your new house is complete.
When it comes time to decide which property is right for you there is much to consider and no two wires will arrive at the same conclusion after going through the pros and cons. For some, a new house will perfectly fit their needs while others may feel that an existing home will tick all the boxes of their choice. But whatever the final decision it is important that one should thoroughly review all points of comparison between an old and a new house.
If you are stuck in any kind of dilemma related to investment in both commercial or residential properties, then feel free to contact Cobb-Lundquist & Atnip, Inc. the best realtors in Corpus Christi Texas, to offer you a helping hand and serve you better.