When it comes time to invest in a property, deciding whether to buy new or old is a hot topic and can often lead to disagreements. This is your hard earned cash and it deserves to be invested in a place that is right for you. To better help you decide your next step, let’s take a look at the pros and cons of both options.
NEW HOME INVESTMENT
The beauty of a new home is that you are its beginning. The walls and floors are fresh, and the bathrooms and bedrooms are built to current code requirements. New homes are energy efficient, and free of the deferred maintenance that can result after years of use or neglect. It’s a brand new beginning for you and your property. That’s exciting.
First and foremost, do your research. Get to know your builder. Investigate their history, brand promises and track record. You’re looking for a builder who is known to manufacture strong properties and known to be diligent in problem solving if any issues arise. This is crucial. Secondly, while new homes tend to cost more than older homes, the sticker price doesn’t always tell the whole story. For instance, the price of a new home usually doesn’t include window coverings or landscaping, and the flashy upgrades that caught your attention in the model home cost extra.
A well-built new home should be relatively maintenance-free for the first ten years or so. While this is ideal, do not be alarmed if you come across a few items that need fixing within the first several months of buying a new home. A new roof can leak if a skylight or vent pipe isn’t properly sealed. The house also needs time to settle. Minor problems are to be expected.
OLDER HOME INVESTMENT
There’s something about the character and warmth of an older home that is usually lacking in a new home. The architectural distinctiveness of a well-constructed and designed older home is something to consider. Older homes usually have mature landscaping and they are often conveniently located in neighborhoods with better schools. They have also withstood the test of time, which is not the case with new homes.
The main point to consider is that older homes may need refurbishing. Although an older home may seem to cost less, it may end up costing you a lot more than a new home depending on how much work the house requires.
It’s imperative to request documentations from the sellers regarding major work done to the property. Request copies of work proposals and paid invoices. All this information will be useful when it comes time for you to sell. If the roof was replaced recently, find out if the roofer will extend any remaining warranty to you. Knowing the cost of your utility bills for the summer/winter months will also help you budget.
To evaluate the true cost of an older home, find out the age of:
• the roof
• appliances
• major systems (plumbing, heating/cooling/electrical)
Ask your home inspector to estimate how long each of these items is likely to last. Then, get replacement estimates from licensed contractors.
TIP: Whether you decide to purchase a new or older home, it’s crucial that licensed professionals inspect both types of properties. Don’t make the mistake of foregoing an inspection just because a home is new. It’s a good idea and in your best interest to get a new home inspected twice: once during construction and again when it’s completed.
BOTTOM LINE: Always consider quality and ask yourself if this is a smart investment. You’re best choice lies in the details: quality–built new home or a well-maintained older home. Take your time and choose wisely.
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