If you’re a real estate investor, you may have already considered the prospect of building a new construction property. When done right, a new construction investment can produce great returns since properties are often sold for more than the total costs associated with building them. There are real estate investors whose entire business model is based on building low-cost homes and selling them for profit. These organizations can be successful because they understand how to plan and build real estate property with the goal of making a return. In this article, we cover some crucial tips for investors that can help make a new construction project more profitable.
Tip #1: Choose the right features
In order to have a successful construction investment you need to make sure you’re building a property with the right features. You will need to make design decisions that have broad appeal, like neutral paint colors for the walls. Don’t build a home with your personal tastes in mind, since it can be difficult to sell a property if it has features only certain people will like. You should also look to incorporate modern design elements like open concept. Remember, if your goal is to sell the property afterwards you will need to keep your spending in check. Have a set budget, stick to it, and don’t go overboard with features so that you can still turn a profit.
Tip #2: Build in the right location
Location is always an important factor with successful real estate deals. People want to live in safe neighborhoods with access to good schools and amenities like shopping areas close by. Building in an area such as this will make it much easier for you to find a buyer. You can also benefit from building your property in a hot market seeing high growth. By the time construction is completed, your home is likely to sell for a higher amount due to increased demand. Be sure to research different markets before deciding where to build and remember that you don’t have to limit yourself to markets near you.
Tip #3: Hire trusted professionals
The right professionals can make all the difference when it comes to new construction projects. For example, a good builder will be able to provide examples of past work, and they may also have design suggestions that can save you time and money. A trusted real estate agent will be able to find you a buyer quickly, and they’ll make sure you receive a good offer on the home so all the money and effort you’ve invested doesn’t go to waste. If you’re having trouble finding a quality professional, try reaching out to family and friends to see if they can refer you to someone they trust.
Tip #4: Learn to negotiate well
Negotiation is a key skill that will come in handy in the real estate world, and it transfers over to other business endeavors too. For new construction projects, you may be able to negotiate with your builder on pricing. If they aren’t budging, they may still be able to give you a steep discount on upgrades for the home, like higher-quality countertops or newer appliances. When it comes to the sale of your property, you will be trying to get the most out of your efforts, and negotiation skills can help ensure you don’t end up on the wrong end of a bad deal. Taking the time to sharpen these skills can prove very beneficial for your real estate investing goals.
RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors. If you are an investor looking to finance a new construction project, RCN Capital has competitive loan options available. Connect with us today to discuss your next real estate investment.