Let’s have a look at another really common question we get about which property to choose:
I told my uncle I’m looking at buying a property investment. He reckons I should find a great neighbourhood, find the best street, and then buy the worst house on it. He suggests that I do it up and make a fortune in capital gains. Is he right?
Your uncle has a point. For those with the time, expertise and budget, buying the worst house on a good street and renovating can be a great way to build capital in an investment. Most of us, however, aren’t builders, quantity surveyors or project managers. Most of us don’t have:
- The time or expertise to plan, fund and oversee a renovation project.
- Access to an ace team of tradespeople. Remember, the finish on a renovation of a high-end property needs to be flawless – you’d need a sound team to achieve top results.
- The time and/or funds to let our investment sit without tenants while a renovation is done (or worse, runs over time and over budget).
For most of us, there is less risk in buying a solidly build new home in a good or great area. There are several benefits to this plan:
- There’s no need for renovation. This means less risk, less hassle, and less time without tenants.
- You’ll still reap the rewards of capital growth, especially if you buy in an area as close as possible to a main centre.
- You can make the most of incentives, such as NRAS.