Benefits and drawbacks of buying older property
A property (apartment or house) is considered to be old when ownership has already been transferred (i.e. it has been or is still being lived in) and the work was completed more than 5 years ago.
Is it more advantageous or more prudent to buy old? Whether you're a rental investor or a first-time buyer, you've probably asked yourself this question. In the real estate jungle, it can be hard to find your way around. Find out here about the advantages and disadvantages of buying an older property.
The advantages of buying old property.
Buying a new home means being able to imagine what it will be like to live in it, based on plans alone. In an older property, you can physically explore every nook and cranny, and have a clearer view of the existing interior and exterior fittings, and any renovation or refurbishment work that may need to be carried out.
Property availability and market scope
The time required to purchase an older property is much shorter than for a new development. You don't have to wait for work to be completed before you can take full advantage. What's more, the older property market is vast, so there's plenty to choose from. You'll be able to find exceptional, atypical properties full of charm, as well as invest in lively areas or those in the process of becoming so.
Economic advantages
Prices can be very attractive, depending on the area. A new development costs 20% to 30% more than an older property, for the same surface area, amenities and location. The value of an older property can also increase more rapidly over time: for example, a property located in a sought-after (or expanding) area, or one that has undergone energy-efficiency renovations. Please note: there are a number of energy renovation assistance schemes, and tax credits or reductions are also available.
Tax advantages
While there are fewer tax breaks for older homes than for new-build, there are a number of incentives available, subject to strict conditions:
- PTZ: Prêt à Taux Zéro (zero-rate loan). This is granted on condition that the total cost of the work carried out corresponds to at least 25% of the total cost of the purchase.
- The Pinel law. This scheme applies if :
the property is in an advanced state of disrepair, and therefore does not comply with the rules of decency (law n°89-462 of July 6, 1989, article 6). In this case, the renovation must be as good as new, and meet all decency and energy performance requirements;
the dwelling is premises (commercial premises, warehouse, hangar, barn, etc.) intended for conversion to residential use.
Negative points of buying an old property
There are a number of disadvantages to buying an existing property, compared with buying a new one.
- Acquisition costs: notary fees and registration fees are much higher than for new-build properties (3 to 4% of the property's value for new-build vs. 7 to 8% for old-build),
- Maintenance costs can be higher. This is because the materials and equipment in the home are also old, and therefore require more frequent maintenance, or even complete replacement. In this case, the environmental standards now imposed on new buildings can help you make substantial savings, while enhancing living comfort.
- Bringing your home into line with the various standards imposed can be very costly (heating, thermal insulation, energy diagnostics, etc.).
- The home no longer benefits from the ten-year warranty applicable to new buildings.
Please note: Investing in an older property requires certain precautions. Don't neglect to check the quality of the construction, and take note of all mandatory diagnostics (energy performance, lead, asbestos). In case of doubt, don't hesitate to call on professionals in the building renovation field (structural work, small-scale work, property diagnostics, etc.) for advice. You can also consult the Town Hall to check that no construction is planned in the vicinity.