Buy or build investment property?

Go property hunting

Buying vs Building

The decision to build a property from scratch or buy an existing one comes down to personal preference. Some home-buyers fall in love with the idea of a home with heritage, while others want a brand-new property that they’re the first to live in.

Renovate or create?

Both have good and bad points, so here are some things to keep in mind if you’re trying to decide between the buy and build options

Buying

Upsides

Inspections on the property will give you confidence there are no problems.
You can search in a range of locations, as opposed to buying in an area under development.
You can buy a property in a great area (a good school zone for example) that needs some renovation and add value to it. This is cheaper than building a home from scratch in a similar area.
The chance to get a feel for the neighbourhood before you buy.

Downsides

The amount of competition for the property and if you’re buying at auction you won’t know if it’s in your budget until bidding starts.
No home is going to be perfect for your requirements or decorated 100% to your taste, so it’s likely you’ll need to spend more money to put your stamp on it.
The age, style and construction method of the property may mean you can’t add the features you want to it.
If pre-purchase checks aren’t completed, you could end buying yourself a lot of issues along with a house.

Building

Upsides

The opportunity to build the home you’ve always wanted (budget-willing!) without compromising on your wish-list.
You can create an eco-friendly or passive home that will provide a healthier environment in which to live, and also deliver lower energy bills.
Maintenance or DIY on your property won’t become an issue for years.

Downsides

Finding suitable land suitable may see you build further out from a city or town. Longer commutes will impact on your spare time.
Decisions, decisions, decisions! You’ll make plenty of them (often with little time to fully consider options) which can make building a stressful process.
You need to read and fully understand your plans and set money aside for items not included in the building process such as curtains and landscaping.
Time over-runs due to supply or labour issues, along with last minute changes to the plans (upgrades for instance) can blow out your budget. Keep a building contingency fund on hand, which is typically 10% of the total build cost, to counter this.