For many people who want to own their own home, the decision to buy a house comes with all sorts of different questions as to what is the best option for their needs, and how to best go about achieving their goals. For people who are looking to buy an investment property, the intention of buying a house is often to find a place they can live in while working to increase its value so that they are able to sell it for a profit.
Others who are looking for a family home, may not be looking for a speedy turnaround of the property, but may want to live there permanently. There is no real wrong or right answer to the question, although there are a number of benefits in developing an existing property over starting with a new one.
Getting the Best Deal
When it comes to finding an ideal investment property, buying new is not going to provide you with the best investment. When you buy a new house a good part of the money that you are paying is towards the developer, so you will be paying for marketing costs as well as the property, as this is often factored into the price tag. However, buying a second-hand property that needs a little work could get you a great price tag and the potential to increase its value.
Better Negotiating Potential
During the activity of negotiating the best price for a property, an older property has much more chance of being sold below cost than a new property. A developer is very unlikely to construct a property that they need to sell immediately and potentially lose money on, but for someone selling an already established property it can mean dealing with an imperfect market. So they may be more likely to accept a lower price than they would have hoped to get for the property.
If you buy a new home then it already has everything new, including the kitchen, bathroom, floor and wall coverings, so there is less potential for adding value. However, an older established home that is in need of repair provides more opportunity for remodelling, value adding and increasing the selling price. An example of this is when buying a property that is on low ground, and prone to flooding.
You may be able to buy the house for a good price but then by having it lifted and remodelled you will not only create extra space underneath but also increase its value remarkably. Companies such as Black & White House Raising and Restumping are frequently called in to assist with their skill at lifting houses out of flood waters .