5 benefits of building instead of buying.
Thinking of taking that first big step onto the property ladder? It’s a common struggle for first-time homeowners to deliberate between buying a house or building one before they approach their mortgage broker.
Buying may allow for closer proximity to the city, while building may require you to widen your search radius to find suitable land. At Mortgage Choice Essendon, we know there are pros and cons to both options. We explore some of the benefits of building instead of buying which can help you in your decision making.
1. Saving options
Purchasing land and building ‘from the ground up’ can offer a variety of distinctive benefits that an established property cannot. For example, when you buy land for a new home build, you pay stamp duty on the value of the land only. However, when you purchase a new home that’s already built, you foot the bill for stamp duty on the value of both the existing house and the land.
This difference, coupled with the opportunity to avail of the First Home Owner Grant, could be a significant deciding factor for whether you build or buy, as avoiding stamp duty payments and receiving a grant could decrease your costs considerably.
You can always speak to a Mortgage Choice mortgage broker in Essendon who can assist you with figuring out additional cost savings options for your new home. We’d also suggest talking to your accountant, as newly built properties and their interiors may mean you are also eligible for more deductions on your taxable income, another attractive cost-saving element of building your first home.
2. Creative Control
When purchasing an established home, there may be elements of the house that aren’t to your taste. Unfortunately, you may be unable to alter parts of the house that aren’t to your liking, and if you are, these alterations can often lead to extensive refurbishment costs. When building a house, you have a blank canvas to start your bespoke home (within reason) from scratch.
From deciding what type of heating you want to choosing where the barbecue area should go, you will have the opportunity to be involved in the creative process from the beginning. Depending on your passions, this can be a considerably unique and special opportunity for first-time homeowners. Our mortgage brokers in Essendon can discuss your options for budgeting the interior of your new home.
3. Environmental factors
Older homes will typically contain used appliances that are less energy-efficient and in turn, can result in you paying hefty heating and electricity bills. Building a new home can not only help the environment but can be beneficial for your budget too. A brand new house will be equipped with fresh materials and new, energy-efficient appliances, making the build considerably more eco and cost-friendly.
Building a home also means you can work out what design elements will be most efficient for your home, such as how to capture more natural light, what window glazing you use, and selecting a well-thought-out heating and cooling system.
4. Investment opportunities – subdividing properties, renting out a brand new home.
As many prospective homebuyers are seeking a newly built home, building a new house and subsequently renting it out could be a frugal way to invest. You can take advantage of better capital depreciation with a new property by claiming deductions over the maximum life span of the home, versus moving into a property that has already begun to depreciate.
As well as benefiting from healthier depreciation with a new home, if you select a lot of land that can be subdivided into multiple homes, you’re in a good position to plan for future developments. However, make sure to do your research as different council areas have different rules for this option. Here at Mortgage Choice Essendon, our mortgage brokers will be happy to point you in the right direction for investment opportunities.
An older home can bring with it potential issues that may not be obvious when you initially view it. Structural issues or prolonged wear and tear can arise and cause problems in the long term. A new build means you eliminate those risks. Similar to the environmental benefits, a new property and it’s modern contents are unlikely to have any issues, especially in the first few years, and if they do, they’ll typically have a warranty. This allows for less maintenance concerns and more time for you to enjoy your beautiful, new home.
Here at Mortgage Choice Essendon, we know building or buying can be a tough decision to make. Regardless of what you choose, you’ll need to establish how you’ll pay for it and that’s where your mortgage broker can help.
Consider talking to a Mortgage Choice Mortgage Broker in Essendon and applying for pre-approval. With pre-approval, you’ll know how much you could borrow, which makes it easier to budget when you’re speaking with a builder or developer.