In a country like Bangladesh where every square inch of space comes at a premium cost, many people are now moving towards buying second-hand apartments. New real estate will always have an appeal, especially for those who come from old money or have significant earnings/ savings to invest into this sector. Pre-owned or ready flats, on the other hand, have a set of challenges; but also have some advantages that perhaps need to be studied in deeper detail to understand them better. Whether buying second-hand property is a proper investment or a hidden trap depends on a number of different factors.
One of the main benefits of going for second-hand property is that these are highly affordable. Compared to brand-new homes, used flats are usually 20 to 30% cheaper, which is how they are more accessible for people living in the middle-income range; even in neighbourhoods like Gulshan, Baridhara and Mirpur DOHS.
Another advantage is the location. Most second-hand property that is up for sale has been built in a well-established locale with built-in infrastructure, with immediate access to services like schools, hospitals, markets, etc. This means that if you want to invest in a used apartment, there will most likely be no need to wait for the construction to be completed.
Apartments that will be resold are ready for immediate occupancy, and often have repairs & renovations already done on them. This is especially a big boon if you do intend to move into the property at the earliest possible time. If you are indeed choosing an older home, you might even have the flexibility to renovate the property as per your liking.
Even with so many advantages, there are also a number of challenges that one faces if they are looking to invest in second-hand apartments. Older buildings might be in urgent and immediate need of structural or electrical repairs, which would increase the long-term costs to new buyers. If you have decided to look into an investment in the second-hand property market, then the next step would be to hire a structural engineer who can check for mold, cracks and other utility issues to make sure you are not dumping money into a worthless project.
Another issue often faced by buyers of second-hand or secondary property is the array of legal complications waiting for them. Verifying the original ownership, making sure there are no dues that have been left unpaid, and confirming a clear title before buying the home can each be a difficult task. Buildings that are older could also be inadequately equipped with modern amenities like lifts & parking spaces. This means that both their resale value and their appeal will diminish with passing time. Value retention of apartments is much better in areas like Baridhara, Gulshan and Banani, especially because of their prime locations & availability of modern amenities.
Similarly, property in Uttara and Dhanmondi appreciates annually due to community facilities & robust infrastructure. If your apartment is in a complex with a strong apartment association and is well-maintained, then you can definitely get your money’s worth in investment value. If you are looking for financing options, these days those are available too. Institutions like DBH and BRAC Bank offer home loans and financing options for secondary property too. You can look into a combination of family loans and personal savings.
Whether you are looking to invest in a resale flat because it fits your budget or to keep it for your retirement, you should always weigh the pros and cons before you decide on where to put your money. Your needs and resources will define your final decision – so make sure to put your best foot forward.
