Hi all,
I have a brand new 2 story home in Point Cook Melbourne.
If there was a house which was exactly the same (garden, lot size etc), but 1 year old, what should the % difference in price between?
Many Thanks
I’d say go for the one that is one year old and try to use this as your negotiation “angle”. In regards to a %, I don’t think you could apply a rate to it, the best way you have is to find out how much other comparables (1 year old with same characteristics) are selling for. Get the selling agent to give you a print out of actual sales data, get them to work hard. Happy Investing
thanks Jonchu,
its just that trying to get a valuation on my own home will be difficult as I only have older houses as comparables (1-3years), and mine was completed 1 week ago!
After another 12 months, they will both be the same price roughly, as they wll both be second-hand.
This is why it's not always a good idea to buy brand new properties. Better to buy the one that is near new as it will be priced according to the market; not the developer's margins.
If an identical house to yours, but less than 12 months old was sold tomorrow for $20k less, then yours would be valued by the bank probably around the same, as this is the closest comparable in the immediate area.
The depreciation in the building from a taxation point of view is 2.5% per year for 40 years from date of completion, but this is never reflected in it's value.
Another nice little trick about property investing that the managed fund sales people forget to mention. You can depreciate the asset against your personal income tax while it goes up in value, and, provided you never sell, you get the tax deductions, which are "on-paper" so you haven't had to outlay any cash from your own pocket to get them, AND you get the increasing value of the asset.
Cool, huh!
Hey
You may find this article of interest in relation to buying a new property vs. a second hand property.
http://www.washingtonbrown.com.au/news/depreciation-for-profit.htm
Regards
Tyron Hyde
http://www.washingtonbrown.com.autouchingcloth wrote:thanks Jonchu,its just that trying to get a valuation on my own home will be difficult as I only have older houses as comparables (1-3years), and mine was completed 1 week ago!
Why? What do you consider a comparable? Next door/same side of the street/same design/same suburb? No two properties are identical only comparable.
Are you after a current market valuation (by valuer, just engage one) or an estimate of value/market appraisal (by a realtor, call a couple for an opinion).
Are you after a valuation for insurance purposes? Use a QS or valuer
Are you after a valuation for refinancing purposes? Use a valuer
You must need to understand the purpose for which you are seeking a valuation if it is actually a valuation that you require, then use the appropriately skilled professional.
Remember, cost does not necessarily equal value.
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