As an investor, your financial needs are different to people buying a house as a home. You’ll need financing that maximises cash flow and enables your property portfolio to grow. We understand this need because all our qualified Specialist Mortgage Advisors are also property investors.
Choosing to build for your investment comes with many advantages over and above purchasing an established home, such as:
- Builder’s warranty – All new homes come with a builder’s warranty on structural, services and workmanship. This translates to reduced maintenance expenses and therefore increases your cash flow each year.
- Depreciation – The ATO allows the building to depreciate over 40 years and the fittings and fixtures from 3 years to 15 years. Building a new home maximises such depreciation and increases the tax deductibility when compared to purchasing an older home.
- Vacancy – new homes are loved by tenants as they know everything works. They know there will be no nasty surprises when the property is in good order. A tenant will tend to stay longer in a new home which increases your cash flow and reduces your vacancy periods.
- Rental Return – Most tenants will happily pay that little bit extra to rent a new home when compared to an older home. Just like a new car is more appealing, so too will be your new investment property.
- Property Repairs – ask anyone who has owned either a pre or post‐war timber clad home for a number of years and your day will be filled with stories of upkeep, repairs and maintenance. Simply put, a new brick‐and‐tile home significantly reduces property repairs when compared to timber‐clad, pre or post‐war homes.
There are other advantages to newer homes such as government assistance and grants, NRAS (National Affordability Rental Scheme), DHA (Defence Housing Authority) and other government programs. Don’t be fooled by the ‘cheapness’ of an older home: repairs, maintenance, vacant periods and lower rents all add up to extra expenses, lower income and poor cash flow.
Contact Building Loans Australia today, and we’ll discuss how you can benefit from an investment in a new home, and use equity in your existing home to further maximise cash flow.