Buy established or buy new? The arguments for both sides

Vacant land and new residential communities are appearing regularly, particularly on Melbourne's outskirts and in other cities where land is in no shortage of supply.

Stephen Thompson, Allworth Homes' managing director, said that this makes it a good opportunity for investors, who should consider building a new home as their next investment.

"It is a lot easier than perceived and will give you many benefits along the way," he said.

"Building a new home gives you a blank slate to work with, allowing you to choose all of the decorative features that you prefer. New means low maintenance and more energy efficient as a result of being constructed with the most up-to-date materials, saving you money in the long run."

These are the reasons he provides 'for' purchasing a new home:

• It’s not as hard as you think. Investors can have minimal hands-on involvement throughout the process and deal directly with the builder to purpose build what they want on their land.
  
  
• Choose the best block. Most builders will assess your block of land free of charge. Or select from land the builder may have already assessed as suitable.
  
  
• Choose the design. Think about what your ideal tenant would want and choose a design to suit. Choose how many bedrooms, bathrooms and even living areas. There are multiple options to choose from when you building new.
  
  
• New homes command top dollar rental. People want to be a part of something new. A brand new property in a great location is super attractive to potential tenants.
  
  
• Capital gain. Selecting a block and builder yourself means you’re the one that will enjoy the capital gain when it comes time to selling the property.
  
  
• Tax advantages. Depreciation allowances apply on the building and also some home contents. Investors should consult with their finance professional to determine their exact tax advantages.
  
  
• Lower ongoing maintenance cost. Big repair bills are a negative to your bottom line and viability of the property as an investment.
  
  
• Save money. Do a little legwork and cut out the middle man. Investor buyers are paying a premium for ready-built.

However, there are also substantial advantages for buying established properties.

Here are Property Observer's reasons 'for' buying established property:

• Usually obtain a discount. You are dealing with a home owner, or investor, usually - rather than a developer. This means you can negotiate down the price, and offer other attractive items, such as a different settlement period, to help secure the deal.
  
  
• You know what it is from get go. It's already there, and there's no messing around. The builder won't do the dodgy on you, and you move in knowing upfront how big it looks and feels and what is included.
  
  
• Renovation potential. Not only can you buy properties that need work for under market value, and face less demand, but you'll also find yourself able to do them up, or sometimes DIY, with any funds you have left available. This will increase the value and, if done well, save you money.
  
  
• Timing. You can buy that house and have the settlement period down as quickly as arranged. When building, there can be unexpected delays or time blow-outs - and you have to wait until completion.
  
  
• Can buy in a built up area. You might not want to buy in an area that's open for development, and this can prompt problems if you're looking for a new place, however established properties are available. You'll need to double check if the area's supply is going to be increased beyond balance by any new developments or house and land estates.
  
  
• Tenants may be in situ. Regularly, properties go onto the market with a tenant already in the house, or a recent history of rental that you can get a gauge of market demand from.

Do you prefer new or established property?