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Major Benefits Of Investing In A New Development Property

  • June 21, 2021

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Real estate is a proven investment strategy. More resilient than most investment markets, real estate investment can offer great ROI. Even so, there are nuances to choosing the right property investment opportunity. Not all properties offer the same potential for returns, and some may remain relatively static in value for long periods. Property developers in Australia tend to recommend opting for development properties, and with good reason.

There are numerous advantages to investing in new development properties. Today we invite you to join us as we list the top significant benefits of investing in a new development property.

Builder's Warranty

A builder's warranty is a huge plus when buying development properties. Conventionally, when you buy a house or other real estate investment, you are guaranteed maintenance and repair costs. These may be minor or could turn out to be incredibly costly. On the other hand, new development properties come with a builder's warranty; this helps cover the majority of related expenses you would otherwise face.

Up To Code

People love doing renovations to their homes. Most articles on the topic would believe that a basic renovation is the best way to increase your property's value. This is true, but it can lead to headaches for the investor. Many renovations, particularly older ones, do not meet current codes and regulations. These problems range from energy efficiency standards to outright building code violations. A development property will almost always satisfy these requirements, saving you money.

It's An Indicator

New developments aren't just a good investment opportunity for those looking to turn a quick profit. They also indicate the economic situation of the area in which they are being built. Regions that are facing economic difficulties are less likely to attract a developer's interest. The reasons are self-explanatory. A developer wants to make money and therefore selects for areas that are experiencing increased demand. Increased demand is an indicator of economic prosperity.

More Value, More Growth

Aside from the fact that properties on a new development almost always hit the market at the lowest selling point that they will ever be, there is also more room for your investment to grow. While older, established properties see a small percentage of valuation every year, a new development usually sees significant valuation during the first couple of years after coming to market. That period is when savvy investors make the most profit.

Less Cash Down

A significant deterrent to those purchasing their first investment property is the excessive deposits that one must usually dole out. When a development property is up for sale, entry costs are commonly much lower; this is due in part to common funding practices that new developers may rely on in general.

A developer might require a deposit of as little as 10% of the sale price. What's more is that because construction is usually at least partially funded by pre-sales, developers may offer excellent discounted prices to those willing to purchase a development property sight unseen.