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With the housing shortage greatly affecting the availability of homes in the US, the market is in need of newly constructed homes now more than ever. This shortage presents a unique opportunity for investors to benefit from building and selling homes for profit. Although not every location will be ideal for new construction, there are specific markets that are experiencing high demand which would be perfect for it. Choosing to build in one of these markets can lead to significant returns for real estate investors. In this article, we share some of the best markets to consider for new construction property, as well as a few tips to help you get the most out of your investment.
Austin, Texas
Austin has been experiencing rapid growth for various reasons the last few years. Workers have been flocking to the city since Tesla and other tech companies have moved their headquarters to the area. The job opportunities, low taxes, and a growing arts & cultural scene serve to draw more and more transplants to the city. With the population increasing at such a high rate, the average home price has increased by 40% since April 2020.
Nashville, Tennessee
Sun belt states have seen some of the most growth in the country, and you’ll find quite a few cities located in the belt that made our list. The city of Nashville is one of them, with the median price of homes increasing by an average of 18% year-over-year. Along with the city’s bustling music scene, the job market in the area is estimated to be the second strongest in the country behind Austin.
Tampa, Florida
Florida has always been a key-destination for movers due to the sunny weather and the lack of a state income-tax. The city of Tampa also has the added benefit of a growing job market, and a close proximity to multiple beaches and attractions. From April 2021 to April 2022, the median sale price of homes has increased by $50,000.
Charlotte, North Carolina
Charlotte is the definition of an up-and-coming city. The main draws to the area include its lower cost of living, and relatively warm weather throughout the year. It also boasts a growing job market, with top companies such as Bank of America, Wells Fargo, and LendingTree having headquarters in the city. The median sale price of homes in the city has increased by just under 19% year-over-year.
Denver, Colorado
The city of Denver in the Rocky Mountains is another great place to consider for a new construction investment. It’s an ideal location for lovers of the outdoors, with lots of nature to see and explore. On top of that, it offers plenty of entertainment options within the city limits. Ever since the start of the Covid-19 pandemic, it’s been a top destination for remote workers looking for a place to relocate. If you want to capitalize on this growth, now is the perfect time to make an investment in the area.
Tips for maximizing your profits with new construction
- Choose a great location: Location is always one of the most important factors when it comes to real estate. You may already have a market in mind, but what about the neighborhood you want to build in? Ideally, it should be safe, with a close proximity to good schools, as well as access to amenities like restaurants and shopping areas.
- Don’t go overboard with features: The end-goal of your project is to make a good return, so you don’t want to invest so much into a home that it kills your profit margin. Make sure the features you add to your home will lead to a higher property value. That way they will actually be worth your time and money.
- Hire reliable professionals: The right professionals will make all the difference with your construction investment. It’s generally recommended to ask your builder for references of past projects, that way you can get an idea of the quality of their work. You should also work with a good real estate agent, since they can ensure your property sells quickly and for the right price.
- Work with a trusted lender: 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 investment, RCN Capital has competitive loan options available. Connect with us today to discuss your next real estate project.