Reasons a New Construction Property is a Great Investment

Reasons a New Construction Property is a Great Investment

New construction homes are one of the most popular items on the market. Not only do they offer new materials like roofing, siding, and flooring: but they also offer the chance for you to make a large investment that will pay for itself over the years.

 These are the top reasons a new construction property is a great investment and why everyone should consider purchasing one soon.

Higher Home Value from Materials Used

Many new materials are coming out every year, and people are eager to get their hands on them. In new construction, dozens of properties come with new materials every day, so you don’t have to worry about upgrading the property yourself. This encourages renters and buyers to perceive the property as higher value, which means that as the home gains importance in the market, it’ll continue to be seen as a good asset until these materials age out in twenty to thirty years.

Reduced Short-Term Maintenance

If you buy an older home, there’s plenty to worry about. How sturdy are the insulated metal panels? How well maintained are the pipes and HVAC system? These are all issues that the home inspector should catch, but they can still add up to a huge amount of money you’ll need to spend within the first five to ten years of buying a home if it needs these upgrades.

 Instead of pouring your time and money into researching residential repairs and figuring out how often you’ll have to stop by the rental property: you can sit back and allow the new construction to save you from all of this work.

Home Insurance Costs Drop

Insurance companies prefer to cover newer homes since they come with far fewer risks and are expected to last longer than any older builds. Because of this, you can expect homeowners’ insurance to be less expensive and easier to find. This will save you a lot of money in the long term and keep your monthly bills in a more comfortable range. 

More Attractive and Up-to-Date Options

If you want a more attractive and modern home: you’ll find it in new construction. Whether you’re interested in stucco siding panels or you’re more excited about looking at smart-home details like a smart thermostat, you’ll be able to find it in a new construction property.

 These properties usually also have more curb appeal, with fresh green grass or other details that would usually age into looking boring or unkempt over time with an older property. 

Better for Rental and Income Properties

If your main goal with your investment property is to rent it out and make money over time: a new construction property is the best choice. You can rest assured knowing that the property you’re advertising to renters is in excellent condition and can request a higher rate of rent than many older construction properties could.

 If your new construction is in an area that was recently developed, this is also a selling point to renters since these are often quieter and more peaceful neighborhoods. Over time it might gain more personality, but in the beginning, it’s a definite perk.

Lower Energy Bills Every Month

Energy bills are something that everyone has to deal with: and can quickly turn into a massive amount of spending. Regardless of how much you try to keep down your energy bills, if a property is older construction, there can be leaks in anything from your exterior wall insulation to your windows and doors. Beyond this, an older HVAC system might simply not run as well as a newer one. 

 This all adds up to a property that has lower energy bills and allows residents there to save some money every month. This is a great selling point for renters and an awesome way for you to save money if you’re the one living there. 

More Reliable Dating on the Materials

In some older properties, the only way to date material is to find the receipt for it or try to gauge the age based on how much wear and tear it’s been through. Thankfully, on new construction, you don’t have to worry about that. New construction gives the entire home a blank slate and allows you to plan for the future so that you’ll be ready to deal with updating to a slate roof or changing out your siding when it’s finally time.

 This schedule is awesome for anyone planning on renting out their properties since it allows you to plan this cost into the rent and decide what changes you’ll want to make annually as you own the property.

New Construction Properties Are a Game Changer

Whether you’re buying the property for yourself to use or you’re investing in an income property that will pay for itself over time: there are tons of reasons to consider investing in a new construction property. This is one of the best options out there, so make a good investment.

Ryan Shure is an editor for the Innovative Building Materials blog and a content writer for the building materials industry. He is focused on helping fellow homeowners, contractors, and architects discover materials and methods of construction that save money, improve energy efficiency, and increase property value.

Rent Increases: 8 of Top 10 Highest Are Fla. Metros – Great news for investors looking for a great return on their money.

Rent Increases: 8 of Top 10 Highest Are Fla. Metros

FAU: At 32.8%, Fort Myers tops U.S. metros in year-to-year rent increases. S. Fla. (up 31.07%), Sarasota (30.88%) and Tampa (26.9%) also made the top five.

BOCA RATON, Fla. – Rents for homes and apartments have soared nationwide over the past year, and Florida remains at the heart of a problem overwhelming U.S. consumers, according to an analysis of 107 rental markets by researchers at Florida Atlantic University (FAU) and two other schools.

Based on year-over-year rent increases, eight of the Top 10 markets are in Florida, with only No. 4 Sierra Vista, Arizona, and No. 7 Knoxville, Tennessee, making the list from outside the Sunshine State.

Renters in Fort Myers, on Florida’s west coast south of Tampa, have been hit particularly hard. The average rent there for April was $2,073, up 32.38% from a year ago, the nation’s largest increase.

In terms of the largest premium paid by renters, metro Miami (including Miami-Dade, Broward and Palm Beach counties) remains the most overvalued market at 22.07%. The average monthly rent in the Miami area climbed to $2,846, even though historical leasing figures indicate the average should be only $2,331.

The full rankings for April can be found online.

The researchers at FAU, Florida Gulf Coast University (FGGU) and the University of Alabama say Florida has been hammered by spiking rents because demand increased during the pandemic while supply chain issues and rising material costs have hampered builders from adding supply. In some landlocked areas, such as Miami, finding available property to develop is a major challenge.

“For some people, renting was the only way they could afford to live in Florida, and now that’s becoming a burden, too,” said Ken. H. Johnson, Ph.D., an economist in FAU’s College of Business. “I think you’ll see more renters take on roommates and cut back on eating out, because it’s either that or they won’t be able to pay the rent.”

Johnson, Bennie Waller, Ph.D., of UA, and Shelton Weeks, Ph.D., of FGCU, started analyzing rental markets in Florida earlier this year before expanding the study nationwide.

They use past leasing data from Zillow’s Observed Rental Index to statistically model historical trends from 2014 and determine where rents should be now and compare those to existing rents. The difference between the two is the premium renters are paying. The higher the premium, the more overvalued a rental market is.

“The way out of this is to add more rental units to the marketplace,” said Waller, of UA’s Alabama Center for Real Estate. “But it’s just not realistic to expect a bunch of new projects in the near term, given the supply chain problems and the often slow pace of government approvals facing developers before they can put a shovel in the ground.”

In the vast majority of the markets surveyed, rents are far above their long-term trends, but there is evidence that rent growth is slowing in some areas.

On a month-to-month basis, the average rent in 11 markets declined slightly. Those areas include Augusta, Georgia; Youngstown, Ohio; and New Orleans.

“Depending on the market, some rents may be stabilizing, but they’re still much higher than they were a year or two ago,” said Weeks, of FGCU’s Lucas Institute for Real Estate Development & Finance. “It’s incredibly painful for middle-class budgets.”

Source: Florida Atlantic University College of Business

2022 GlobeNewswire, Inc.