Hi All,
I've started to look at houses for my first IP. I'm wondering what people think about buying brand new houses as investment properties. I've read Steve's books and while I like his approach I don't want to be so active with my properties. I have a good job, so I'm thinking more of a buy and hold strategy rather than renovating, wrapping etc. There are new houses, basically spec homes available which aren't much more expensive than established houses and they seem like they might be worth a look. What do people think?
Thanks.
Steve Generally says that Problem + Solution = Profit.
What are you purchasing here is the solution, not a problem. maybe a some sort of renovation is a problem and you solve it somehow. I generally would steer clear of brand new houses they are just solutions.
Also would a brand new house be like a brand new car? The house is all perfect not used at all, then someone goes in and it is second hand, does this drop the value. If so then you would be paying a premium for something that will instantly drop in value the minute you own it.
Chris.
I wouldn't touch them personally. The only new houses we have in our portfolio are the ones we have developed ourselves.
New houses don't offer any "value add" benefits, there is nothing you can do to improve the valuation straight away. You cannot develop, subdivide, renovate or do anything else to add value.Ever wonder why people selling new houses push tax benefits and depreciation so much? That's all there is!!!!
They also tend to be overpriced when compared to the "median value" for the area so capital appreciation will be much slower!Personally I also have a preference for brick, sandstone and character, I really dislike the modern rendered look and cheaply built brick veneer!!!
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