Home Investments Property Why New Builds Are Profitable Buy-to-Let Investments

Why New Builds Are Profitable Buy-to-Let Investments

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Around 1.7 million Australians own investment property – which corresponds roughly to 8% of the population. The majority of real estate investors own only one investment property, which is one house or apartment aside from their residential home. Indeed, 3 in 4 Australian landlords have only one rental to their name. However, investors are slowly working their way to the top of a robust and profitable property portfolio; investments in further properties increase over time as the day-to-day financial ties reduce. Middle-aged adults and pre-retirees are more likely to purchase additional properties.

There is a clear pattern of investments in the real estate market. Homeowners start their journey with one rental and work their way to the top of the property investment ladder – however, many investors settle with only one rental investment. Nevertheless, if you are keen to climb up the property rental ladder, you need to focus on reliable and cost-effective buy-to-lets. Here is why you should invest in new builds to boost your portfolio.

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New estate builders choose their location carefully

First of all, it’s worth noting that new build real estate offers more choices and variety than your typical rental property. Indeed, typically, the investor would come at an early stage to the project, buying their lot before the house is built. The process enables investors to not only choose the best location for their budget – should it be an end-of-row house, a fully detached family home, or a terraced house – but also to be part of the building and decorative strategy – typically, they get to choose the flooring solution and the paint and can sometimes amend the floor plan. From an investor’s perspective, it’s fair to say that you never get to make these decisions when you buy an old home. Additionally, builders too are careful about their choices. New build estates are ideally located to fulfil the requirements of modern homeowners, staying close to urban centres while being surrounded by nature.

Your maintenance costs are low

When you decide to become a buy-to-let investor, you need to be ready for high maintenance investment. Indeed, as a landlord, you are obliged by law to look after your property. It’s not uncommon for landlords to run regular buy-to-let surveys to identify potential risks and issues before putting the property on the rental market. However, with a new build, you are less likely to come across maintenance expenses. Many new build properties even come with a warranty, which means that for everything that breaks within a handful of years after the construction, the homeowner doesn’t need to pay for repair work – within reason of course, and depending on the source of break.

They have strict energy standards

Last but not least, new properties are typically built with energy standards in mind – the latest regulations of the building code boards for Australia also ensures that constructors stick to strict energy-efficiency regulations. As a landlord, you know that energy-efficient rentals are more appealing to tenants. Ultimately, your tenants want to keep their costs low, and promising small energy bills is a game changer!

For buy-to-let investors, new builds offer an advantageous position in an already crowded market. Aside from being built to the best and most cost-effective construction and energy standards, they also have a choice of location and design for early investors, making sure you can add only the most suitable properties to your portfolio.

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