Established Property
Established properties, while requiring careful consideration, can also play a significant role in your investment portfolio
Customise to your unique situation
Investing in an established property depends on your unique circumstances, cash flow position and overall goals and strategy. There are advantages and disadvantages to buying an established property that should be taken into account when making investment decisions.
Renovate and improve
One advantage of investing in an established property is the potential to add value through renovations and improvements. Unlike brand-new properties, established properties offer the opportunity to enhance equity through simple makeovers or more extensive renovations. However, it’s essential to approach renovations with expertise and guidance to stay within budget and maintain profitability.
Approach renovations with caution, as they can potentially become a financially unprofitable endeavour due to escalating costs and unforeseen circumstances that may erode the anticipated profit. Exercise prudence and careful consideration when implementing this strategy.
Lower costs
Purchasing an established property presents the advantage of lower costs. While affordability is influenced by factors such as location and property type, established properties typically offer a more budget-friendly option in comparison to new properties.
However, owning an existing or older property requires careful financial planning for potential upgrades, maintenance and repairs. These expenses can impact your cash flow and holding costs.
Things to consider
It’s essential to note that older properties typically have lower rental returns compared to newer units, especially if they lack the modern amenities and features that tenants seek. The appeal to tenants may be lower, particularly if the property has an outdated design.
Furthermore, it’s important to consider that changes to tax legislation in 2017 mean that property investors can no longer claim depreciation on used plants and equipment found in second-hand properties. This can impact the potential tax write-offs for investors of established properties.
When considering established properties, it is crucial to engage in thorough research, consult with experts and evaluate your specific goals and circumstances.
Lumo Property Investing can provide the guidance and expertise needed to navigate the complexities of investing in established properties.
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Breaking the barrier: The worst strategy you can have as a property investor
As aspiring investors, it is crucial to recognise and understand that, for decades, Australians have been conditioned to follow one certain strategy, and it may come as a surprise for you to know that this strategy that you may have already implemented plagues 99% of property investors, preventing them from attaining true wealth.
We’ve written this eBook to help you understand the best strategy for your needs and goals, so you can invest in a brighter future.
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