New Launch vs Resale, Which To Buy?
Updated: Apr 22, 2020
You might be thinking to purchase a property but just could not decide whether a new launch property or resale property is a better investment. Well, you are definitely not alone. The important thing here is to understand that there is a different set of considerations when you are buying a property for own stay vs to rent out. This article highlights the important considerations and helps you make a wise choice when choosing between a new launch vs resale property.
Why Buy A New Launch Property?
1. Early Bird Discount
The price of the units are set by the developer. You will be able to enjoy early bird discounts during preview before the official launch of the project. This allows you to enjoy higher capital gain should you sell your unit in future.
2. Wide Selection Of Units
Unlike resale property where you must choose among the units that are on sale, new launches offers a wide selection of units. Whether you are a ground floor or high floor lover, you have a greater chance to secure a unit that will suit your liking. You can also choose your preferred facing such as pool view, garden view or unblocked view. Certain prime units offers high floor with panoramic unblock views, this allows you to fetch a premium sale price in the event you decide to sell.
3. Enjoy Progressive Payment Scheme
Since a new launch condo is still under construction, you have the option of paying for the purchase progressively in stages, rather than all at once. You pay according to the stage of construction it is at. This allows you to make smaller payments and a more manageable instalment obligations. This also means that you can stretch out your loan repayments over a longer time.
4. No Property Tax Until TOP
All property owners will be subjected to property tax. However, you will be glad to know that Property Tax is not payable during the construction period. You do not have to pay for property tax until you collect the keys to you new launch purchase.
5. New Fittings, Furnishings and Facilities
All fittings and furnishings will be shiny and brand new. They are covered by a one year defect liability period from the developer. You get to enjoy the latest furnishings as well as the latest modern facilities.
Many of the new launches now are incorporated with smart home living concept, there are also interesting amenities provided by developer such as concierge service.
Another advantage is that you do not have to put up with the previous owner’s choices, buying a new launch allows you to do up your property according to your specification. When it comes to rentability, many tenants prefer a condo that has a new pool, top notch gym equipments, clean pools, brand new white goods and appliances and white washed walls.
Why Buy a Resale Property?
1. Rental Income Is More Predictable
It is easier to predict the rental income of a resale property. All you need to do is to look at what the current or past tenants have been paying. You can also cross check with the rental income in the nearby vicinity. Better still, you can purchase a unit that is currently tenanted. No guessing, you get what you agreed for.
2. You Can Make Your Due Diligence Checks
Although new launches come with a defects-free period, the time waiting for the defects to be rectified could cause a delay in securing a tenant for your unit. Furthermore, when it comes to new launches, there’s a risk that some defects are simply not possible to rectify. These become lasting problems. For example, the garbage chute for the block is poorly designed causing chokes and foul smells, that may be a permanent issue that will is difficult to resolve and therefore will affect rentability and its resale value.
These kind of surprises can be avoided in a resale unit, provided you diligently inspect the condo thoroughly before you put down the cheque. Finally, when purchasing a resale unit, you can gauge the traffic noise, pest problems and even check out the neighbours. These kind of issues are hard to predict when you are purchasing a new launch that doesn’t physically exist yet.
3. Better Chance To Spot Undervalued Units
There are different reasons why the owners are selling the property. Sometimes, it could be due to issues such as unable to service the mortgage, and the sellers will be in a rush to liquidate their property in a fire sale. Some sellers have emotional motives, the unit may remind them of their recent divorce, and they’re eager to get away from the unpleasant memories. If you have an eye with spotting undervalued properties, this could mean finding very good investment unit. Having said that, you can also bargain with the seller to negotiate the selling price.
4. You Can Collect Your Keys Much Sooner
Unlike purchasing a New launch where you have to wait for years to collect your keys, a resale property allows you to collect your keys within 12 weeks typically. With that, you can start enjoying your purchase be it for own stay or securing a tenant. With the collected rent, you can pay for the mortgage loan.
5. Resale Properties Typically Have More Space
Size Matters! Unlike new launches where space is compromised, getting a resale unit gives you a greater opportunity to land yourself with a more spacious home. This is especially so if you intend to start a family or stay with your parents or in laws. Resale properties tend to be more spacious and allows you to feel the space as part of your due diligence.
So, New Launch or Resale? Ultimately, the decision to buy which condo depends on your goal for the property. Your Call.
About The Author
My passion is to serve my clients in building their wealth through property investments. With prudent planning, creative tax and financing strategies, it is possible to start your investment journey earlier in life and make time work in your favour for maximum wealth growth.
I will be glad to have a chat with you to learn more about your goals and current situation and provide you a step by step road map towards asset progression.