A growing percentage of the home loans we broker at Smartline Rockingham is for investment properties. Recently, a piece in Perth Now revealed that 76.7% of Australian homes purchased in 2015 as investment properties were established homes. This is a rise from the previous year’s 75.8%.
In spite of a rising number of new properties being built, including units, investors are still buying more established properties. So, why is this happening?
Property investors, rightfully so, are in it to make money. Owners profit from investment properties through capital growth and rental yield. Whether the perception is correct or incorrect, established property is currently seen as a safer investment than a new property. 71% of property investors are looking for larger properties located in places that provide optimal lifestyle options.
In WA, the number of buyers who bought established properties went up to 79.2%.
What it Means to You
It is possible that the main reason investors buy established homes is that there are a lot more established homes to choose from than new homes. The only new homes that are as convenient to buy as established homes are finished homes called “turnkey homes,” which combine the benefits of an established home with those of buying a new home.
The two main criticisms of new homes are being too far away from amenities and not providing enough capital growth. In many cases that is true, due to the sameness of homes, the markup from the developer and the location. But it isn’t always the case.
Generalisations usually contain an element of truth but they aren’t always right for everyone. If you are looking for an investment property, you may very well find a turnkey home that suits your needs. Or you may not. It is you who needs to do your due diligence and determine whether or not any property is going to provide the right combination of rental yields and capital growth.
Whether the home is old or new, it’s your money and your duty to make sure you are buying the right property.
Home Loans at Smartline Rockingham
To learn more or to obtain a pre-approved mortgage, call Smartline Rockingham today: (08) 9527 1800.