BRRRR vs New builds: Which property strategy is right for you?

When it comes to property investing, two popular strategies often stand out: BRRRR (Buy, Renovate, Rent, Refinance, Repeat) and New Builds. Each approach has its unique benefits and challenges. If you’re wondering which path could lead you to the best returns, read on as we break down both strategies and share a real-life comparison to make your decision easier.

BRRRR: Building wealth with renovations

BRRRR is all about finding properties with potential that need a little TLC. You buy, renovate to boost the property’s value, rent it out, refinance to pull out some of your investment, and then repeat the process to build your portfolio faster.

Why we love BRRRR

• Quick equity gains: Renovations can increase the property’s value quickly, meaning a solid refinance opportunity.

• Great cashflow potential: Targeted renovations mean you can command higher rents, leading to positive cashflow.

• Land potential: Many BRRRR properties sit on larger, underutilized lots, offering the chance to subdivide or add a second dwelling in the future, further enhancing cash flow.

• Faster portfolio growth: With forced equity from renovations, you don’t need to rely on market growth alone—you can accelerate wealth-building on your own timeline.

Challenges

• Buying strategy: For a successful BRRRR approach, buying smart is key. Look for value-add properties where you can unlock and maximise potential.

• Renovation: A targeted renovation plan is essential to ensure each upgrade maximises your return on investment.

New Builds: A hands-off, steady investment

New builds offer a low-maintenance approach to property investing. With a fresh, modern look and no need for renovations, they provide an attractive, hassle-free option to build your portfolio.

Why investors love new builds

• Low maintenance: New construction means modern features and fewer repairs.

Challenges

• Limited opportunities: New builds are often designed by developers to maximise space and ROI upfront, leaving little room for you to add value or achieve additional gains. That means you miss out on increasing equity gains beyond what the market allows, and you don’t have the opportunity to demand higher rent.

Real-life comparison: One street apart

Let’s look at how both of these strategies play out on two properties just a street apart:

The new build strategy:

In this real-life example, a new build property in a regional centre costs $537,000.

• 3 bedrooms/1 bath

• 115sqm on 251sqm section

• Rent: $600 pw

• Gross Yield: 5.8%

• Equity uplift: -

The BRRRR strategy:

Just one street over is a BRRRR property. Here the property and a renovation comes to $500,000.

• 3 > 4 bedrooms / 1 bath

• 120sqm on 647sqm section

• Rent: $750 pw

• Gross Yield: 7.8%

• Post-reno equity uplift: $670,000

The verdict:

When comparing these two properties, the new build offers the win for convenience. With a rental income of $600 per week, it delivers a predictable, hands-off yield of 5.8%.

But the BRRRR property, located just a street away, takes things to the next level. With a total investment of $500,000 (including renovations), this property transformed from 3 to 4 bedrooms and can therefore command rent of $750 per week, pushing the gross yield to 7.8%. The new valuation of $670,000, brings the equity uplift to an impressive $170,000. AND as an added bonus, the large land size offers the opportunity to add a minor dwelling next year - further increasing the cashflow.

Which strategy suits you?

If you love the idea of active investing and building your portfolio fast, BRRRR might be your match. However if you prefer a predictable, hands-off approach then new builds could be the perfect fit.

If you think BRRRR is the right fit for you and you’d love to get started, book in for a free 15-minute discovery call with me.

I’d love to hear from you and help get your journey in motion.

Ilse.