It is not a secret that there was a surge in new construction in real estate after the pandemic. In December of 2021, 34.1% of homes being sold on the market were new construction. When investing into real estate, there are so many different options you can choose to put your hard-earned cash. Many investors are slowly realizing the benefits that come with investing into new construction properties. Here’s 5 common benefits of investing in this type of real estate.
For investors wanting to minimize the upfront cash they put down on a property, investing into new construction real estate would be beneficial because they will sometimes require smaller deposits than resold investment properties. Builders will often require a small deposit to secure a contract for a newly built property. This can be a huge advantage to investors who want to minimize the upfront cash they invest until the actual closing date of a property.
Low Maintenance and Repairs
One of the benefits of investing in new construction real estate is that you will not have to worry about costly maintenance or repairs in the anytime in the near future. New construction properties typically come with a builder’s warranty that is required by law. A builder’s warranty can cover anything from major systems breaking to the materials and workmanship invested into the project. This warranty typically only covers two years, but there is usually also a ten-year warranty on the structure of the house, like it’s foundation. Investing into new construction real estate guarantees you a warranty on your property and you are assured everything is up to code.
Growth in Emerging Markets
New construction can generally be found around emerging markets that consist of shopping centers, good school systems, and employment opportunities. When investing into new construction, these areas are generally built up areas with great amenities close by. Location is key when you are purchasing a property. Make sure to do your research before investing into new construction to see what that particular area has to offer. Properties are more valuable when they have close by amenities. Look for areas that are continuing to grow, like those building new shopping plazas or nearby parks. Outdoor hobbies have become increasingly popular, and new construction that is close to bike trails or other outdoor recreational hobbies is bound to attract buyers in the long term.
Customization and Control
When you chose to invest into new construction, you have the freedom to customize your property to control costs. New homes are designed to appeal to current trends and styles. Older homes struggle with appealing to buyers since their older styles of construction are outdated. When you invest into a property that is all new construction, you will not have to spend any money on renovating the property to appeal to new buyers. You can control how the house is built, which ultimately gives you the upper hand when appealing to the new market of buyers.
In the last year, new construction in the United States jumped 22%. What makes these properties so popular? New construction properties have more advanced technology that is built to last longer than properties that are currently being resold on the market. Your property will have upgraded, new appliances that are under warranty. Systems like air conditioning, lighting, and alarm controls can all be updated to the latest technology when constructing your new property. It’s true, people like new things! The possibilities are endless when merging new technology with your newly constructed property. New construction allows you to integrate futuristic technology that will offer more value to your property. Aim to integrate technology that:
- Offers a warranty
- Provides comfort or safety
- Makes the home more energy efficient
RCN Capital offers short-term and long-term financing options for real estate investors. Whether you are looking to fix & flip properties or hold properties for rental income, RCN has flexible options that are suited to your needs. Connect with us today to discuss your next real estate investment.