Hi,
I am seriously uneducated about buying my first home.
I have been looking at properties for over a year now.
My thoughts are do I build for around $299k or buy an already established home for around $240k and add to it for value?
regarding building a new home …I can supply all the kitchen appliances and air cons to add value straight away.
What have you done to be successful?
My first buy was an established home. Adding value to an established home generates income and that income is what you can eventually use to build your ideal home. It worked for me, I hope things work out for you.
Buying a new home over an old home is like driving a brand new car off the car lot.
You drive the new car you'll get all the latest fancy gadgets .. fresh seats and that new car smell. And the price drops 20% as soon as you leave the car lot.
Buying a house is similar .. you may find that with older houses you might get a bit more room or older style features which might be attractive to you. You just may not get that new house smell.
The advantage with an older house is in context it should be cheaper and as your salary increases (which we hope it does) you can upgrade and adjust the home to meet your new requirements and budget.
You can get that lovely "new" smell for a few hundred dollars worth of paint and some new carpet
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
I know the excitement of having your first home but to buy or to build is a big question. If you are happy to manage and get into the details of the construction then I suggest that you go for it. Otherwise, if you have a busy lifestyle and going down to the nitty gritty of things is not for you, then better buy an established home from reputable real estate company.
I have a preference for established properties that you can add value to. Particularly via affordable, cosmetic renovations.
Like xdrew said above – you generally pay a premium for a new property and there's no scope for value add which means you could be waiting quite a while for any equity gain.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
I have a different opinion to those above.
My first 2 homes were built and I made a lot of money on both within a year. The key thing is looking at land prices vs house prices. Often land in new estates is more expensive than a vacant lot in an older estate. Having a good builder also makes a huge difference. I was able to negotiate really strongly with my builder and so was able to keep costs down (there are a few tricks to it – keeping colour scheme neutral, not deviating from builder inclusions as much as possible, no changes once choices have been made, doing stuff like landscaping/curtains/painting yourself etc).
I'll give you the figures for eg:
Block of land was $80000
House was $120000
Finish of was $10000
Total was $210000
We sold that house after living in it for 12 months for $298000.
This was 7 years ago.
2nd house was even better. I was lucky though because I could live with parents while the house was being built (which was only 12 weeks from slab down because of our AWESOME builders). Having to cover rent as well as mortgage payments would have sucked.
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