Summary of Pros and Cons Of Building A House vs Buying Pre-Existing Houses in 2024 | The Landlord Society EP26
Podcast Episode Summary
In the podcast episode titled "Pros and Cons Of Building A House vs Buying Pre-Existing Houses in 2024," hosts Charlie and HDK discuss the advantages and disadvantages of building new homes versus purchasing existing properties in the Australian property market.
Main Financial Strategies and Market Analyses
- Buying Existing Properties:
- Opportunity for Depreciation: Existing properties have often depreciated, allowing buyers to focus on the land value rather than the building.
- Renovation Potential: Established properties can be renovated, which can also lead to tax benefits through depreciation.
- Location Importance: Emphasis on purchasing properties in good locations to maximize potential value.
- Building New Properties:
- Tax Benefits: New builds offer depreciation benefits that can offset income, though this is not the primary aim for buyers.
- Fresh and Low Maintenance: New homes come with modern amenities and require less maintenance initially.
- Government Grants: There are grants available for first-time owners that favor new builds.
- Risks of Building:
- Cost Overruns: Fixed-price contracts can lead to disputes if material costs rise, often resulting in builders asking for additional funds to complete projects.
- Owner-Builder Risks: Attempting to save costs by being an owner-builder can lead to delays and increased expenses.
- Market Volatility: The building industry is facing increasing material and labor costs, making it a speculative endeavor.
Methodology/Step-by-Step Guide
- For Buying Existing Properties:
- Focus on properties in established areas with renovation potential.
- Assess the feasibility of renovations and potential return on investment.
- For Building New Properties:
- Consider paying a larger initial deposit (e.g., 20%) to lock in material prices and reduce future cost risks.
- Research and select reputable builders who can manage projects effectively.
- Understand the implications of the building project on future property values.
Presenters/Sources
- Charlie and HDK from The Landlord Society podcast.
Notable Quotes
— 06:10 — « People have done really well out of building houses, you know. »
— 14:17 — « Bloody genius, right? »
— 19:10 — « If I built a house with this patch of land, I'll make money. »
— 19:43 — « That's the good, bad, and the ugly of building. »
Category
Business and Finance