Should you buy an old or new property?

If you’re looking for a new home, chances are you’ve come across properties that were both old and newly built. So, the question is then, how do you decide which one to go for? 

After all, old properties have a lot of character and history—look no further than those Victorian and Edwardian era terraced houses in Australia. However, unlike newer houses, older houses will usually have a lot of pre-existing problems that you’ll likely have to deal with.

For some the choice it’s an easy choice, however when you’re torn between two worlds it may be a bit difficult to decide. Sadly in the end you’ve got to choose: old or new.If you’re looking for a new home, chances are you’ve come across properties that were both old and newly built. So, the question is then, how do you decide which one to go for? 

Buying older buildings or properties not only means inheriting its history but also all its faults. Some buildings might have been well maintained as they were passed down from owner to owner, but others may be in a state of desperate home renovations.

However, while there may be some long term maintenance problems, many old homes were made with some genuine know-how. After all, in some cases, we’re talking about homes that have stood tall for quite a while.

Pros of buying old property

• Older homes have a character and history you may not be able to find anywhere else. 
  
• Come with opportunities to renovate and add property value.
  
• Typically older homes were often built to be long lasting and well insulated. Modern homes tend to be built as a single brick wall (for the outside) and then the internal frame is steel or wood. Older homes often have double-brick walls.
  
• Homes that have been around for a while tend to be near established infrastructure like transportation, schools and hospitals.

Cons of buying old property

• Depending on the age of the property you might be inheriting a weary property with creaky floors and loud piping.
  
• You might find yourself missing out on first time home owner state and federal schemes as many of these are usually for new properties
  
• Renovations may quickly become costly if you don’t budget or make an action plan.
  
• You may have high ongoing maintenance costs.

The purchase price of older homes depends on the location of the property. It is possible that you may find a rundown dinky house worth more than a new modern home, simply because the value of the location is worth more than the actual structure. So when buying a home, old does not always equal cheaper. But the same can be said for newer homes as well.

Purchasing a new home or building something from a plan means that you have the chance to qualify for the First Home Owner’s Grant. The great thing about new homes is that they come free of blemishes and typically come with modern utilities.

Pros of buying a new home

• If you are a first time home buyer, then you may qualify for several government grants and schemes.
• Typically these grants require the property to be a new or a substantially renovated home.
  
• Usually with a new home, there is little to no recurring maintenance needed to keep the property in good shape. 
  
• Since new homes are built with modern technology and equipment, it may have lower energy ratings and be built in an eco-friendly fashion which can reduce ongoing costs.

Cons of buying a new home

• No house is perfect, even the brand new ones. Being the first one living in the new property you’ll be the one discovering any potential problems or faults.
  
• Believe it or not, there is usually a limited supply of brand new properties available. This means that you will find yourself competing with several other people for the property.
  
• If you are buying off a plan, there may be a risk that construction runs longer than expected.

How much you pay for your new house depends on where it was built and much like old homes, the biggest driver of price tends to be location. This is why regional houses are usually much cheaper than houses in capital cities. For example, you may find a new house far away from the CBD to be more affordable than an 80-year-old house near the metropolitan area.

Whether you plan on buying a new property or an existing one, check out Mozo’s home loan comparison table to figure out how to best finance your future home.