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Have you considered investing in new construction for your next real estate purchase? For both homebuyers and investors, new construction projects offer a variety of benefits. As housing supply struggles to meet demand, there will be more buyers looking for paths to home ownership. The building of new homes will need to rise to meet this high level of demand, and prices for these homes are set to rise as well. That makes right now the best time to invest in new construction property. Still not convinced? Here’s 5 reasons to consider a new construction project for your next investment.
New homes are an easy sell
The thing that makes newly constructed homes great is people will want to live in them simply because they are new. Being the first to live in a home and use all its appliances for the first time is a great feeling. And since the home is new, it will be built in a contemporary style and with modern features like open design. All these aspects add up to a desirable property which should be in high demand to home buyers and renters.
They provide solid returns
The other great thing about investing in new construction is it provides great returns for investors. Often a new home will be worth much more than the cost of materials and labor used to build it. There are investors whose entire business model is based on building homes in high-demand areas for consistent profit. Even if you’re going to rent the home out afterwards, you can expect the property to fetch a high monthly rate on the market since it will be brand new.
Low maintenance and repair costs
Before you buy an existing home, you should consider the cost of making updates to the property and repairing any major issues it may have. With new homes you don’t have to worry about such issues, and if anything does go wrong you will often have a builder’s warranty to cover it. If your plan is to rent the property out you’ll see even more benefits. Insurance on new homes costs less, and they are often built with energy efficiency in mind, which means lower monthly bills for you.
You can choose where to build
One of the best advantages of new construction property is you get to decide exactly where the home will be built. You can benefit greatly from building in a “hot” market experiencing high demand, where higher property values can lead to big returns for you. A brand-new home in a market like that is bound to gain value over time as well. Plus, new homes are often built in great neighborhoods with other new homes, which means it will be easier to sell or find tenants for the property. Be sure to do research before deciding where to build to maximize your gains with new construction homes.
Appreciation
Like many other types of real estate, newly constructed homes can benefit from appreciation. The property will already be worth a fair amount as soon as it’s constructed, but holding onto the home for a period of time can net you even more gains. As we mentioned, if you choose to build in an up-and-coming neighborhood, your home’s value will grow as the surrounding area develops and as other new properties are built. Many real estate investors will choose to sell their property once construction is completed, but you can turn your property into a long term investment and benefit from appreciation with a construction-to-permanent loan.
RCN Capital
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.