The most common debate in real estate is whether to invest in old or new building properties.
Even though it’s difficult to say with 100% certainty which one is a better investment, both options have some distinctive qualities that need to be examine.
The major factors that investors and individuals always consider, are firstly, their investment budget, secondly the purpose of the investment and finally, its future value.
In this article, we have weighted the pros and cons of each option, in order to pinpoint the major common considerations that buyers should examine for a pre-owned or new real estate property.
Even though someone may argue that you cannot compare new building properties with old ones due to their significant inconsistencies, investors and individuals tend to use this practice mainly because of budget limitations, different needs and future plans.
In almost all cases, the investment budget is the major factor taken into consideration by investors and individuals; therefore, the price of the property plays a significant role when comparing two properties (new and old) with similarities in their overall characteristics i.e. country, location, square meters, number of bedrooms, amenities etc.
Therefore, what are some of the most common considerations that investors and individuals should examine before proceeding with their decision to invest in old residences or new properties?
Insolation system, Old heating (or absence of it) and cooling systems
In many cases, resale houses over 15 years old, may suffer from bad insolation problems, sogginess and moldiness.
These problems may lead to high electricity bills all year around and may generate high maintenance insolation costs for fixing the whole building structure.
Wear and Tear factor
As mentioned before, you never know what problems may be hidden in older buildings. The results of high humidity and bad insolation are prone to build mould on the walls and leaks and as a result, they damage the building structure.
Similarly, very often old buildings may have poor drainage system and weak water pressure system, which are associated to the older technology used during construction. As a result, repairs, replacements and upgrades may be inevitable with unpredictable costs.
Older buildings may suffer from structural problems and materials defects
The older buildings may be affected by structural leaks or concrete cancer resulted by inside water leakages that can lead to rust, mould, concrete displacement, fretting and cracking.
In addition, older buildings may suffer from major structural problems that, through the bricks contraction/dilation effect, displacements may occur that can lead to disturbing the fitting of windows, doors etc. Unfortunately, the aforementioned problems have unpredictable maintenance costs since further examination should then be performed by experts, in order to determine and isolate the problem.
High probability of architectural defects
Roofs are an example of a typical design defect that is being classified among the most severe of all types of defects.
Unluckily, this defect is very common in buildings over 25 years old and it is costly! The owners of older buildings, in many cases, do not treat problems until they get worse because they may be renting it, do not have the budget or do not know the problem existence.
Possible presence of hazardous building materials
Buildings constructed mainly in early 80’s and 90’s may have used in their construction structure hazardous materials like lead or asbestos. These types of materials are classified as hazardous because they may cause health problems; therefore, it is highly recommended to avoid old buildings at all costs that have used these materials.
Lead can cause damages to the nervous system, kidneys and other organs and can be found in paints, roofing – flashings and fasteners, in plumbing pipes, connectors and solder.
Whereas the contact with asbestos may cause chronic obstructive pulmonary disease (COPD) and maybe cancer.
Unfortunately, these types of materials can still be found in old buildings.
Subsequently, investors and individuals are advised to arrange a professional inspection that may include building X-rays, insolation and sewer system quality and performance checking, wood pests, roof check, etc before proceeding with the purchase of an old residence.
Of course, these inspections are costly and should be thoroughly considered before proceeding, since it may reveal complicated problems that may result in reconsideration or withdrawal of the investment.
Additionally, even if there are no major faults in the old property, investors and individuals should consider the age of the property. Therefore, they must carefully weight up their decision, simply because the age of the building may diminish the value of their investment.
Moreover, it is noteworthy to mention that if the buyers’ intention is to rent out the old property, they should be ready to deal with constant phone calls from tenants that would address common wear and tear issues.
On the other hand, investors and individuals can overcome many of the pre-mentioned problems with the purchase of an under construction or ready-made new property.
With the new building, investors and individuals have the opportunity to move in or rent out the property, without worrying about high maintenance or renovation costs.
New properties from accredited developers use high quality materials and modern insulation techniques.
Newly built residences are, in most cases, energy efficient, eco-friendly and have low-cost maintenance. Walls, ceilings and floors are properly insulated in accordance with the new regulations of energy saving, the dual pane windows are especially developed to retain more heat in winter and keep the home cooler in summer.
Consequently, with the new materials and latest insolation techniques, the energy bills tend to be lower compared with an older house of the same size.
High standards and new regulations for construction, make new buildings more efficient, ecological, sustainable and safer, since they provide guidelines to architects and mechanical engineers on which structures and materials to use.
Off-plan and under construction properties allow customization and enhance flexibility on fixtures and fittings, finishes and flooring. Buyers that select these options can alter their property according to their individual taste and style.
Many new homes include modern features and innovations such smart home provisions, security systems, solar panels and other sustainable materials. All these features provide an extra boost to the property value.
Most importantly, when buying a property in the stage of construction, especially when the property is situated in a privileged, high value location, investors and individuals can secure a high return on their investment (ROI).