When purchasing an investment property, there are several factors that go in to the decision-making portion about which property to purchase. One of those factors is whether to purchase an older home, or a newer home. Both have their pros and cons – it depends on the investor, and what their preferences may be. Certain factors may be more important to investor A than they would be to investor B.
In a recent article on BiggerPockets, author Erion Shehaj lays out a few benefits to purchasing an older home, as well as a newer home.
Here are the three main benefits listed for purchasing an older rental property:
- Established location and neighborhoods closer in
- Predictable market rates for values and rents
- Older properties are usually better built
Benefits to purchasing a newer rental property:
- Newer rental properties tend to be zoned to better schools
- More predictable cash flow through lower major capital expenditures
- Higher energy efficiency and lower utility bills for your tenants
- Longer lease terms and less turnover
- Higher growth potential
Obviously different markets may not hold true to these lists, but as the author points out, “the purpose of this article is to be an overview of the trends that apply in most cases.”
To view the full BiggerPockets article, click here.