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Buy to Let: Old or New Property?
So, you’ve decided you definitely want to purchase a buy to let. Good idea – provided you have worked out your sums and already thought carefully about your target market.
If so, it means you will know what your maximum budget is for the property, and where you want to buy it. But, what about the type of property you’re looking for ie do you want a New Build, or an older property? There are pluses and minuses to both. Here we have already laid out some of the main pros and cons to help you decide better:
Is It a Good Idea to Buy a New Build House?
Sometimes the property isn’t even built yet. In other words, it’s what is known as ‘off plan.’ The developer will be able to give you measurements and show where the property will be built. He or she will even be able to show you what it will look like, thanks to CAD and virtual reality technology.
Advantages of Buying a New Build
- You might be able to negotiate a discount with the developer if you’re one of the first to buy
- By the time the property is completed it may have gone up in price so you’ll already have made a profit
- You’ll probably find a tenant quicker with a new build than an older property since it’ll have a more modern interior and there won’t be problems with dampness
- There is usually off-street parking with new builds (a very important ‘must-have’ for many car drivers these days)
- If it’s an apartment it may have a lift – which young mums with buggies with love
- New build schemes tend to have good transport links and amenities nearby, such as shops and a park
Disadvantages of Buying a New Build
- You’ll have to wait until it’s built before you can rent the property out and earn rental income
- There’s often snagging problems with New Builds, such as lights not working property or a draught in a window etc
Many prospective tenants will prefer an older property to a New Build. That may be because of the period in which it was build ie Victorian and Georgian houses and flats tend to have higher ceilings and bigger rooms. Then again, cute country-style cottages and cosy terraced houses are also usually a winner for attracting tenants.
- Older properties have character and history whereas often New Builds are described as personality-free boxes
- Features can be fab in older properties ie oak beams on the ceiling, a kitchen Aga, sash windows and original varnished floors.
- In later years you might have the opportunity to turn your older one-bedroom Victorian property into a two-bed by converting a dining kitchen. You’ll be able to charge more rent and its capital value will increase
- Unless you’ve spent a fortune on new heating and insulation, your older property will be far less energy efficient than a New Build. This can prove very important for tenants who obviously want to keep their utility bills as low as possible. New laws which came into force only recently means that if you’re property doesn’t have an energy efficiency rating of ‘E’ or above, then you won’t be allowed to rent out, by law
- Internet access isn’t always great in older properties – especially if you’re in the countryside or in a hilly valley. These days, with the increasing desire and possibilities of working from home, high-speed internet provision is a major issue for tenants
- The older the property, the more likely there is to be problems with wiring, heating and even damp and mould. These can all be expensive to repair and replace (ie in the region of thousands of pounds).
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