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Many real estate investors tend to shy away from new construction projects, even though they can be one of the most profitable ways to invest in real estate. New homes tend to sell for more simply because they’re new, and in the right market they can net investors an exceptional return. If you want to make the most of a new construction investment, it will be essential to keep up with market trends and incorporate them into your project. A new home that is properly built, in the right market, and with the right amenities, is sure to fetch a high price when it comes time to sell. Continue reading to learn about some of the latest trends in new construction homes and how you may be able to capitalize on them with your next real estate investment.
Understanding the Current Real Estate Landscape
With many real estate markets still being affected by the national housing shortage, new construction delivers much needed homes to areas with the demand for them. Taking the time to find a good market can be the key difference in making a better return on investment. You can take a look at data on a particular area to determine if it’s a good place to build property. For example, if the data indicates that the population will grow for a number of years, you can safely assume it will also mean more demand for homes. Another good indicator of demand is a growing job market, which often centers around a metropolitan area.
Market Trends You Can Capitalize On
There are several growing trends in real estate which can help raise the value of your investment when you incorporate them into a new construction project. These include:
- Sustainable building practices: Greener buildings made with energy-efficient designs, lighting, and appliances come with many benefits. They use less energy, and are heated and cooled more efficiently, which ends up saving owners money in the long run. These practices can be a great marketing point for your property while also being good for the planet.
- Smart Homes and Technology Integration: Another popular trend with homes in recent years is smart devices and automation systems. Doorbell cameras have become all the rage, and smart thermostats can be a great way to save money on heating and cooling. You can take things one step further by installing smart locks and smart lightbulbs in a new property. All of these devices can be controlled remotely as well, allowing owners to effectively manage their homes while they’re away.
- Manufactured Homes: Manufactured homes are smaller, simpler homes that are often shipped to a location in pieces and assembled on-site. They have been growing in popularity to meet the need for more affordable homes on the market. They cost far less to build than their standard counterparts, and they often have better profit margins which can be beneficial to investors.
- Mixed-Use Developments: Mixed-use properties, such as those that are split between a commercial space and residential space, can be very profitable new construction projects. They provide owners with a place of business as well as a place to live, or just to rent out and further their income. You can net a great return by building a mixed-use property in a good location, like a growing metropolitan area that will see high foot traffic.
- Work From Home Adaptations: The shift towards remote work has also changed the needs of a home for many. Newly built homes will benefit from including a dedicated home office or even just flexible spaces that can easily be converted into a Work From Home station. You can also take the extra effort to build infrastructure that easily supports a high-speed internet network.
As always, due diligence is what will really make or break the profitability of your investment. Incorporating trends won’t make much of a difference if the project is simply a bad investment. You will still need to take the time to find a good market, plan your project carefully, and stay ahead of any snags in the construction process. Once you have nailed the fundamentals, you can begin to incorporate these trends to really maximize the return of your new construction project.
RCN Capital
If you want to save on a new construction investment, work with a trusted lender that can get you the best leverages and rates. RCN Capital lends to real estate professionals, commercial contractors & developers 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 acquire financing for a property, RCN Capital has competitive loan options available.Connect with us todayto discuss your next real estate investment.