Do New Builds or Renovations Give the Highest Return on Investment? | Ep. 48

In this episode, we look at whether new builds, or existing renovation projects give the highest return on the capital you have invested. This episode is based on an article that Andrew recently wrote for the NZ Property Investor Magazine. 

In the article, Andrew compares a $500,000 new build, with an existing property purchased for $400K and then renovated for $50K (resulting in a renovated property with a $500K valuation). He shows that a new build would require capital of $100K, whereas the existing property would require the investor to risk $170K worth of capital.

While – over a 10 year period – the existing property would net an additional $64K worth of returns, as a percentage of the capital risked it returns a lower ROI. The new property nets 291% ROI, while the existing property returns 209% over the 10 year period. 

If you are interested in learning more about property investment in New Zealand, then head to the Opes Partners website to read the Epic Guide to Property Investment in NZ. This is the most comprehensive, free guide to investing in property on the internet.