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New Construction vs Existing Properties: The Rental Investment Breakdown
Manage episode 491153392 series 3603762
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Building to rent versus buying existing stock - which strategy makes more sense for property investors? We dive deep into the compelling reasons why new builds are increasingly becoming the preferred choice for savvy rental property investors across New Zealand.
The numbers tell a powerful story. New rental properties in regions like Kapiti Coast command premium weekly rents of $650-700+, creating strong cash flow potential from day one. But the advantages extend far beyond just higher rental income. We share real examples of maintenance headaches from older properties, including a recent $2,000 repair bill across several rentals in just one month - costs you simply won't face with new construction.
Financial institutions have recognized the reduced risk profile of new builds, requiring just 15% deposits compared to the standard 20-30% for existing properties. This significantly lowers the barrier to entry for investors. However, we uncover a critical technicality that catches many investors by surprise: to qualify for these favorable lending conditions, you must purchase directly from the developer or builder, not from another investor who never occupied the property.
The 10-year builder warranties, reduced maintenance requirements, and ability to attract higher-quality tenants make new builds particularly attractive. As we discuss in the episode, successful property investing requires removing emotion from the equation and focusing purely on the numbers - and for many investors, the calculations strongly favor building new.
Ready to transform your investment strategy? Consider whether building new might be the key to unlocking greater returns while providing quality housing in your community. Subscribe to our podcast for more insider tips on maximizing your property investment success!
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Chapters
1. New Construction vs Existing Properties: The Rental Investment Breakdown (00:00:00)
2. Episode Introduction (00:00:20)
3. Building to Rent Out (00:00:35)
4. Property Maintenance Costs (00:01:32)
5. Investment Benefits of New Builds (00:03:22)
6. New Build Purchase Requirements (00:05:37)
7. Episode Closing (00:06:43)
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