As an investor looking to purchase a buy-to-let property, one of the most important decisions is whether to opt for a new build or an older property. Both options possess unique advantages and disadvantages, depending on your needs and budget, so weighing them carefully before deciding is vital.
This article will discuss the pros and cons of new and old build properties in terms of their appeal to tenants, maintenance costs, investment returns, and other factors.
The Pros and Cons of Buying a New-Build Property
Pros
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Modern features
New-build properties are generally more attractive to tenants due to their modern amenities and aesthetic appeal. New builds often come with modern features and fittings, smart home technology, and other improvements that can add long-term value to the property, making them more attractive to tenants looking for a modern living space.
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Better energy efficiency
Modern construction methods and revised legislation have made new-build properties much more energy efficient than older properties. This can result in lower energy bills for tenants, helping to make your property more attractive to them.
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Lower maintenance costs
Since new builds are relatively more recent, they typically require fewer repairs and maintenance than older properties. This can result in reduced costs for you as the landlord since you will not have to pay for frequent repairs.
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More personalisation when buying off-plan
If you purchase a property off-plan, you may be able to choose certain features, such as fixtures and furnishings. This can help you create a more attractive property for potential tenants.
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Warranty
New-build properties typically come with a warranty from the developer, which can provide peace of mind and protection from costly repairs in the future.
Cons
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Higher purchase price
Developers often charge a premium for new builds, making them more expensive upfront. This can reduce your profit margins and lead to a long wait before you turn a profit.
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Longer commute
New builds are often located further away from the city centre and other desirable areas, meaning tenants may have to make long commutes. This can make your property less attractive to potential tenants.
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Smaller lots
New builds are often built on much smaller lots than older properties. This means fewer living and yard spaces for tenants and less potential for improvement, making them less attractive to some prospective tenants.
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Delays in completion
Developers can often encounter delays when constructing new builds, meaning you may have to wait longer than expected for the property to be completed. This can delay your rental income and reduce your return on investment.
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Snagging issues
Snagging issues are common in new builds and can take time to resolve. These issues can range from minor defects, such as misaligned tiles, to major structural issues, like plumbing problems. As such, it is important to check for snagging prior to purchase and ensure that the developer resolves any problems before the property is released.
The Pros and Cons of Purchasing Older Buy-to-Let Properties
Pros
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Lower purchase price
Old builds are typically cheaper than new ones, meaning you can get a lower price upfront and potentially turn a profit quicker. This can help to improve your return on investment.
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More Spacious
Older properties often have larger plots and more yard space than new builds. This can make them more attractive to tenants, especially those looking for extra outdoor space.
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Established neighbourhood
Older properties are usually located in established areas, allowing access to amenities such as schools, shops and transport links. This can make the property more attractive to potential tenants.
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Character and history
Buy-to-let old builds often come with unique characters and history that are not found in new builds. Georgian and Victorian properties are especially popular with some tenants, as they have a more traditional feel.
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Potential to add value
There’s often more potential to add value with an old-build property, as you can typically make more extensive improvements. This can help to increase the rental income and improve your return on investment in the long term.
Cons
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Higher costs for repairs and maintenance
Considering the age of some old builds, you may have to spend more on repairs and maintenance compared to a new build. You may also receive more calls from tenants regarding repairs.
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Poorer energy efficiency
Older properties often have less efficient heating, insulation and double glazing than new builds, and this can result in higher energy bills for tenants, making them less attractive.
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Renovation costs
Many old builds require renovation to make them attractive and functional for tenants. This can include painting, carpeting, and other improvements, such as replacing windows and doors.
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Outdated features
Old builds often have outdated features like single-glazed windows and old electrical fixtures, making them less attractive to potential tenants. This means that you may have to spend money on modernising the property.
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Long chains
Purchasing an older property can often involve a longer chain, increasing the risk of problems during the sale process. This can mean delays in moving in or renting out the property.
Ultimately, it is important to do your research and weigh the pros and cons of purchasing a buy-to-let new-build or an old-build property before you decide. Considering your priorities and goals as an investor before diving into the market is essential. By doing your due diligence and researching the potential risks, you can make an informed decision that is right for you.
Chambré: Your London Buy-to-Let Property Partner
Chambré offers comprehensive letting and management services to clients who have purchased a property in prime London locations. Our expertise lies in the buy-to-let market, and we pride ourselves on being the go-to private client property specialist in the area. We can assist you in finding the perfect investment property, overseeing the purchase process, and handling any renovation or building work required before the property is rented out. Contact us today to learn more about our services.
FAQs
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Is it a good idea to buy an old buy-to-let property?
It depends on several factors, such as the property’s condition, the rental demand in the area, and the potential return on investment. Old properties may require more maintenance and repairs but may also be located in desirable areas that attract high-paying tenants. It’s essential to do thorough research and due diligence before purchasing.
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What should I consider before buying an old buy-to-let property?
When considering an old buy-to-let property, it’s important to factor in the cost of any repairs or renovations that may be needed. You should also research the local rental market to ensure that there is demand for the type of property you are considering.
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Is it better to buy a new build buy-to-let property?
There are pros and cons to buying a new build buy-to-let property. On the one hand, new properties are likely to be more energy-efficient, require less maintenance, and come with warranties that cover major repairs and defects. On the other hand, new builds can be more expensive and may not have the same charm and character as older properties.
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