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Building a new home as an investment

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Building a new home can often be a great investment. In addition to the normal tax advantages of investment properties including the ability to tax deduct mortgage interest against your rental  income, you can also deduct a generous depreciation allowance for the fixtures and fittings of the home.  Here are some other reasons that a new home can be a great investment. 

New building and less maintenance

As a landlord, you are required to fix any issues with the house. For old homes, there can be substantial maintenance requirements that can be both time consuming and expensive for landlords. Newer homes usually have fewer maintenance issues and the substantial structural repairs are the responsibility of the builder to fix. This means as the landlord you can spend less time and money on repairs. 

New layouts and fittings

It's much easier to attract tenants to a house with modern layout and fittings, compared to an older home in poor condition. Many tenants like walking into homes with new kitchens and bathrooms which feel fresher and cleaner. As the house is already new and fitted out in a modern way you won't need to do substantial renovations to make the house attractive to tenants. 

Defined budget

When looking at investment properties you often need to make allowances for required upgrades, which can range from small issues such as replacing tap washers and painting rooms through the expensive (but hidden) issues such as upgrading wiring or plumbing. When you build a new home you have a defined budget and don't need to add extra money to the budget for these unknown repair and upgrade costs. It makes it easier to budget for your investment property. 

Attractive location

If you choose to build a new home in a hew housing estate you have a built in tenancy market as other people who are building homes in the area often like to rent in the area as their house is being built. This lets them place their children into local schools and provides a ready pool of eager and community minded people to be your tenants. 

If you are looking to buy an investment property a new home can be a great option. If you would like to explore your options further it can be worth meeting with a new homes builder to discuss what home and land packages may be within your budget and meet your needs.