If you’re interested in maximizing your investment strategy, purchasing a second property should definitely be on your list of options. After all, people will always need a place to live, so whether you’re renting out a vacation rental when you aren’t there or flipping a home, there are a variety of ways to find a secondary income stream from your new home purchase.
When it comes to making a decision about whether it’s better to buy old or new properties, there are a few different factors to consider. After all, purchasing a property for the purpose of investing is a very different game than deciding whether you’d rather live in a new property or and old property. Here are a few aspects to keep in mind as you work out which option makes the most sense for you.
The pros and cons of purchasing a new home.
One of the biggest benefits of purchasing a new home is the ability to take advantage of various tax depreciation benefits. These sorts of tax breaks can ultimately make your investment a prospect that’s much easier to process. This benefit, combined with the fact that many newer construction homes come with top-of-the-line luxuries and the latest trends could make them easier to rent out in the long run.
Even though there are definite benefits of purchasing a newer home, you’ll likely need more money in order to afford this sort of investment approach. Newer homes can often be more expensive than older ones since they have no other flaws and are thus much more desirable. That being said, particularly if you’re most interested in having a condo to vacation at or owning a rental property, a new home is a much easier option.
The pros and cons of purchasing an old home.
Old homes certainly come with their own unique challenges, but with those high risks can come high rewards, too. While an old home that needs a lot of work might not be ideal for renting out immediately if you’re interested in getting in on the ground level of an up-and-coming neighborhood, buying an older property can stretch your budget further.
Particularly for those investors who want to flip houses, finding an older home with “good bones” can be crucial. That being said, the home inspections you have before making an offer on an older house become even more important when flipping is your end goal since these sorts of properties can quickly become money pits if you pick poorly. It’s never a bad idea to check in with a few different inspectors in order to get a wider range of perspectives about the home you’re planning on flipping, just to make sure that it’s worth investing in in the first place.
Find the right loan to keep your profitability high.
Of course, whichever decision you make, you’ll need to qualify for another home loan in order to make your purchase. Especially for an investment property, it’s a good idea to look at a variety of home loans before picking which lender you’re most interested in going with. Shopping around for different loan rates can help you find a more competitive interest rate, ultimately boosting the profitability of your investment.
Thankfully, the internet makes it easier than ever to look at and compare different lenders. For example, you can compare home loans with iSelect in just a few clicks. This can give you the breakdown of the information you need to make the best decision possible, whether that’s shopping for a fixed interest rate or a flexible repayment schedule. As a result, you can make the most of your investment, building wealth while providing a great new home for somebody else at the same time.