Shortages of available land in established areas and current government tax incentives are driving investors to look towards knockdown rebuild developments as an ideal investment option – because savvy investors realise when it comes to older properties, the value is often in the block of land not the house itself.
Basically, regardless of whether investors are seeking to rent or sell the property, it is rarely a simple case of handing over the keys to a property manager or real estate agent. Most of the time existing properties come with their particular set of quirks that require further investment to either maximise rental return or to sell for a profit – and renovations can be costly!
This is why many investors are deciding to knockdown and rebuild instead. Because knockdown rebuild development costs generally stack-up extremely well when pitted against a typical renovation – but it’s not just about the costs involved. There are a host of other benefits investors should be aware of when deciding whether to knockdown and rebuild, such as:
Increase equity – A modern home, built to the latest building standards will increase the equity in the property, in comparison to leaving an older building stand. This should in-turn improve the investor’s rental income or profit.
Tax depreciations – Investors can claim depreciation on the existing property that is being demolished, as well as the new building that is being built. Plus new homes depreciate at a slower rate than older properties, meaning reasonable savings can be claimed at tax time.
Less maintenance – A new house is going to require considerably less maintenance than an older property. For investors planning to maintain ownership and rent, this can mean a lot let ongoing costs throughout the term of the investment.
Energy efficiency – Selling or renting? It doesn’t matter. An energy-efficient house is highly sought-after to owners or tenants who are interested in ensuring bills for heating, cooling and lighting will be minimised – especially in a market when power costs are set to increase.
Warranties – Having a home warranty, as well as appliances and fittings under warranty, will also give investors or a potential homeowner peace of mind when making their investment. Unexpected costs are the last things anyone wants.
Knockdown Rebuild Top Tip:
Select an experienced builder that has already completed similar developments in the region you are intending to invest in. Securing local knowledge and expertise is an investment in a smooth-running development, so you don’t need to stress about costs and timelines and just focus on realising your investment goals.
Jones Homes is a Knockdown Rebuild expert in the Newcastle, Maitland, Hunter and Port Stephens areas. Our team can handle every part of the development, including council approvals, demolition, construction, even landscaping. Talk to our team about turning your investment goals into reality with a quality rebuild on your piece of land.