What are the Pros and Cons of Buying a Resale Property?

Purchasing a resale property is an appealing option for many home buyers looking to find a home with character, established surroundings, and potentially a more competitive price point. Jag Sidhu, a well-versed real estate expert, delves into the advantages and disadvantages of buying a resale home, offering essential insights for those considering this route in their home-buying journey.

Pros of Buying a Resale Property

1. Charm and Character

Many resale homes offer unique architectural details and craftsmanship not often found in newer constructions. These features can include original woodwork, custom fireplaces, and other historic elements that many buyers find appealing.

2. Established Neighborhoods

Resale homes are usually located in well-established neighborhoods with mature trees and established community services, including schools, parks, and markets. These areas often provide a stable, developed infrastructure that many home buyers find desirable.

3. Quicker Possession

Unlike new constructions, which can be subject to construction delays, resale homes typically allow for quicker possession. This means buyers can move in shortly after closing, which is particularly advantageous for those on a strict timeline.

4. Potential for Appreciation

Due to their location in developed areas, resale homes often present significant opportunities for appreciation. With the right renovations and updates, these properties can quickly increase in value, offering a good return on investment.

5. No GST/HST on Purchase

In many regions, purchasing a resale home exempts the buyer from certain taxes such as the GST or HST, which are typically charged on new homes. This can result in considerable savings.

6. Immediate Rental Potential

For investors, resale homes offer immediate rental potential. Since these properties are typically ready for occupation, they can be rented out much faster than new builds, providing an immediate return on investment.

Cons of Buying a Resale Property

1. Maintenance and Renovation Costs

Resale homes can come with their fair share of maintenance challenges. Buyers might need to budget for immediate renovations or repairs, as older homes can have issues such as outdated electrical systems, plumbing, or structural wear that need addressing.

2. Outdated Designs and Efficiency

Older homes may not only feature outdated designs but also lack modern amenities and efficiencies. This includes less effective insulation, older windows, and outdated HVAC systems, which can lead to higher utility costs and ongoing updates.

3. Higher Long-Term Costs

While the initial price might be lower, resale homes can accumulate higher long-term costs. These can stem from continuous maintenance, necessary upgrades, and less energy-efficient systems which all contribute to a higher cost of living.

4. Competition in Desirable Areas

Established neighborhoods often attract more buyers, which can drive up property prices and lead to a highly competitive market. This may force buyers to make quicker decisions and potentially overpay to secure a property.

5. Potential for Less Modern Amenities

Resale homes may lack modern amenities that new construction homes offer, such as built-in networking cables, smart home technology, or energy-efficient appliances, requiring additional investment to update the home to current standards.

Conclusion

Purchasing a resale property has its distinct advantages, such as character, immediate availability, and potential tax benefits. However, it also comes with potential drawbacks like higher upkeep costs and outdated features. Jag Sidhu recommends that buyers carefully consider their ability to handle renovations and maintenance before purchasing a resale home. With the right preparation and expectations, buying a resale property can be a wise investment that grows in value and serves as a cherished home for years to come. Whether looking for a home filled with history or an investment with quick rental potential, understanding these pros and cons is crucial in making an informed decision.