New Duplex of old house? Which has better CG / resale ?

Discussion in 'What to buy' started by Frank Manno, 27th Apr, 2017.

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  1. Frank Manno

    Frank Manno Well-Known Member

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    Sydney
    Sorry I've asked duplex related questions before.. Don't mean to be repetitive I'm just a bit unsure..

    I just put a .25% deposit on a brand new duplex for $900k in Sydney.. I am on a 5 day cooling off and my mind is playing games on me now. (When I say duplex I mean half of the pair. )

    So I'm thinking, would I have been better off with an older house in the same area? An older house that's good enough live in but could use a bit of work? Older house would sell between $850 - $950k .
    Its strange in area new duplexes are fetching close to old house prices.

    My plan is to sell this duplex in about 5 to 10 years lets say. Will my duplex be worth similar to the older house at that time? Similar ratio as of now I mean..

    Here is how I'm thinking..

    If I buy an old house now and live in it and don't spend any money on it. In 5 to 10 years when I go to sell, I'm selling an old house. It was an old house when I bought it and is an old house now.

    But with a Duplex. I buy a -NEW- duplex now and in 5 to 10 years when I go to sell I'm not selling a NEW duplex I'm selling an OLD duplex in competition with new duplexes on the market..

    So it's old house now, Sell old House later

    v

    New Duplex now, sell -OLD- Duplex later.

    How does this compare? Am I really over thinking all this by calculating it this way? I want to make the best family home investment possible..


    -Frank
     
  2. xactly

    xactly Well-Known Member

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    Location:
    NSW
    Houses usually win because you can control the land. All of it.
    Why do you want to sell? Your time frame is a little short if you are using realestate as an investment.

    If it's as a PPOR, then still why sell? Your entry and exit costs over 5 years are massive.

    What is the main drivers for renters or owner occupiers in your area?
    Families with kids and pets? They like houses.
    Professionals? They like new and low maintenance.... new and shiny is better.
     
  3. Marg4000

    Marg4000 Well-Known Member

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    Buy the older house, BUT only if you are prepared to spend the time you are living in it to renovate and upgrade. You simply can't leave an old house untouched for five years without risking noticeable deterioration.

    Unless you are physically incapacitated, there is no excuse for not improving the house while you live there. Even just painting and gardening can add value. Soft furnishings can be picked up cheaply at sales.

    If for any reason you want to live somewhere with no maintenance work, go for the new place. Even after five years it should still be in very good condition.
    Marg
     
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  4. Frank Manno

    Frank Manno Well-Known Member

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    Sydney
    5 years or so living arrangements may change once son moves out.. So I may sell duplex to buy a house further west near daughter. I do't have to but I was thinking 'why not'. I also want the comfort of knowing that this dupex is growing in value nicely and that I'm not losing because I didn't buy a house.. Hence my concern.

    But there's some variables in which I'm hoping that the duplex keeps up to speed so that when I sell it to buy a house further west that the duplex keeps up to speed with price so that the change over isn't costly.

    You see, if I have a house in this area and sell it at any time it will always be worth more than a house out west. They will grow reasonably evenly I feel.. But I'm not sure if the duplex will keep up with out west house prices.. Will it fall behind eventually?

    In the area I am thinking of buying it's mostly families. So since you pointed it out to me a Duplex will be less favourable sale later on.. Good to know that thanks..

    -Frank
     
    Last edited: 28th Apr, 2017
  5. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    Perth
    Land increases in value over time and buildings decrease in value.

    Smart money will be put towards what will appreciate over time.

    There is an exception to this and this is older style boutique apartments on large pieces of land.
     
  6. Mumbai

    Mumbai Well-Known Member

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    An old house does not have to be a money pit and a newer townhouse is not always a safe bet. A friend bought an 3 year old t/h and spent more money in 2 years (fixing stuff) than I did in 6 years on a 50 year old house.