I focus a lot of my time on property acquisitions both residential and commercial. Sometimes, the client’s requirements include both new homes and older properties.
My personal preference is for older properties as they have more character than new homes.
Older properties generally provide more scope to put your stamp on the property. But then again older properties may not always be the best long-term investment, there are pros and cons to both. Here are just a few examples:
New Homes Pros
Price: The price of a new home is set by the developer and real estate agent from launching. Meaning the buyer knows the acquisition costs and the buyer does not need to get into a bidding war. In a market, with high demand, this generally means that a property can be sold and secured quickly. However, as developers are trying to obtain a profit and VAT is applied to new homes in Ireland. Prices are generally higher for new homes vs similar second-hand dwellings in the same area.
Energy Efficient: All new homes now must be built to a very high energy rating. This has benefits for the buyer as it reduces the annual costs or running a household.
Fit Out: New homes generally include, new fitted kitchen, bathrooms and wardrobes. Some developers will also include flooring, carpet and some luckily buyers can snag the show houses. This means that buyers can generally walk into a new home ready to live in.
Snag Lists: Before completing the acquisition of a new home, there is always an opportunity to complete a snag list and send it to the developer to rectify. It can include major issues to smaller issues, like loose door handles or windows sticking. After completing the sale, there will also be a period where issues can raise with the developer. All equipment, including boiler, fridge, cooker etc. will come with warranties.
New Home Cons
Price: As the prices are set on new homes, buyers cannot try to secure a better deal unless the developer is struggling to sell the properties. Buyers cannot try outbid other interested parties either if they wish as it is first come first served. I.e. whoever puts down the booking deposit first.
Energy Efficiency: While energy efficiency is a positive for new homes, it also means that having a traditional fire in a new home is far less likely. There is also an issue that mainly new homes are built on greenfield sites outside cities. This has a more significant adverse effect on the environment with the construction on greenfield sites. Long-term it increases car dependency and is less sustainable living.
Layout & Fit-out: The design of new houses can be very standard within the same development. Designs of all new homes can be very standard across the country. This limits the ability of new homeowners put their stamp on a property. Generally, gardens in new homes will also be a lot smaller. This limits the ability to add future extensions and add value. While new homes will come with new boilers, cookers, fridges etc., most developers will opt for the cheapest equipment suitable.
Car Parking: Planners now limit the number of car parking spaces at many new housing developments, and visitor car parking can be minimal. While older houses may also have car parking issues, car parking rules are well established. In newer housing developments, parking on footpaths, visitors parking other owners’ spaces can all cause issues.
Older Homes Pros
Price: Most second-hand home in Ireland are sold by private treaty; this gives buyers the ability to negotiate on the price of the property. Buyers are also made aware what other interested parties are offering.
Timing: With most older properties being sold by private treaty, this giving the buyer time to research the property and the area, before submitting a bid.
Design & Layout: Many second-hand homes vary in design and layout. Many also include large gardens. Giving the buyer a potential to extend in the future and create a unique property that matches their needs. I believe this can be the most attractive element of buying a second-hand home as some properties give the new owner the ability to create a home that reflects who they are.
Car Parking: While not always the case, especially in or near the City Centre, older properties generally offer more car parking than newer homes.
Old Homes Cons
Price: As mentioned most older properties in Ireland are sold by private treaty. This gives buyers an option to negotiate the price. However, this opens up the risk of buyers getting involved in bidding wars if they do not stick to a strict bidding plan.
Dated Property: When older properties come to the market, they can sometimes be dated in their décor. This will put off some buyers but means that buyers will have to allow for costs of upgrading the property when bidding. Buyers will also have to factor in the time it takes to carry out the refurbishments.
Unknowns: There has been a lot of press around fire issues in apartment blocks. So when buying an apartment, there may always be some unknowns and risks. When purchasing an older house, it is always recommended to carry out a survey. However, the full costs of any issues may be unknown until works are commenced. The costs of ongoing repairs should also be considered.
Energy Efficiency: Older properties will mean higher running costs unless upgrades are completed. And often regardless of the extent of the upgrades it is challenging to improve the official energy rating (BER) due to foundations or open fireplaces.
Protected Properties: Some older properties can be protected externally and internally. This can lead to difficulties when carrying out refurbishments, extensions, changing windows or even trying to improve the properties energy efficiency. Also, even small changes may require planning permission where newer properties would not need planning permission for some changes.
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Always seek advice when buying property.