Purchasing a property can be one of the most significant financial decisions of your life. Whether you plan to buy the property for an investment or reside there with your family, you will come across several risks and issues that should be considered before making an informed decision. As a prospective property buyer, you want to ensure all the risks associated with property transactions are mitigated, providing you peace of mind.
However, locating and assessing property risks can be challenging with several legal ramifications and financial aspects involved in the process. In such cases, considering the assistance of an experienced conveyancing lawyer in Sydney can help you in the long run. Conveyancing lawyers can help you identify the risks involved in the property buying process and mitigate them if needed.
In this article, we will guide you through some common risks involved when buying a property (whether old or new) and ways to eliminate them.
Risks Involved in Buying New Properties
1. Building or Structural Issues
One of the most common misconceptions about buying a new property is that there will be no structural issues involved in the new building. However, upon assessment, you may come across several faults and issues which can possess greater risks. Some builders look for shortcuts or ways to complete the construction job. Such shortcuts can cost you expensive and time-consuming repairs soon. In addition to such costly repairs, you also have to keep chasing the builder to rectify the structural issue. One of the best ways to tackle the issues is by trusting an experienced builder with a proven track record of constructing buildings.
2. Limited Capital Growth
Most buyers purchase off-plan property thinking that by the time the building will be constructed, it will hold a good value in the market. However, the real estate market is fluctuating and unpredictable. If your prediction fails, you may find yourself having a property that you can’t afford as there may be some complications to secure finance. Therefore, make sure you don’t sign a property contract that you can’t afford to settle with.
3. Lack Of Distinctiveness
Most building developers who construct off-plan properties are building identical structures in the market, thus lacking the touch of uniqueness. Purchasing a similar structure will not set you apart from other competitors buying or renting their properties. You can opt for boutique property projects with 20 or fewer units within the building.
Risks Involved in Buying Old Properties
1. Hidden Damage
Most old properties have substantial structural issues that may cost you thousands of dollars to fix. These hidden issues in an old building should be located and detected before purchase. Always carry out a building or property inspection before you buy. Make sure you discuss the results with a conveyancing solicitor in Sydney to determine any areas of concern.
2. Low Depreciation
Tax benefits are provided for properties purchased for investment purposes. A part of the tax benefit derived by purchasing such properties is generated from depreciation. You can legally claim the depreciation as the property ages through this tax deduction. Older property means low depreciation benefits, meaning it will be a less profitable investment for you.
3. Smaller Returns
Most individuals plan to live in an urban, modern property with countless amenities rather than older ones. Consequently, the rental returns of new property are more than old properties. Make sure you invest in a premium quality property that is either renovated or has several amenities.
Ultimately, the decision of purchasing the right property is up to you. If you want professional legal advice on conveyancing, we can help. Our Sydney based conveyancing solicitors help you make informed property decisions and provide excellent legal advice on property transactions. If you want to know more about property conveyancing, call us on (02) 9135 6000 today.