5 Reasons Why Cheap New Homes Are the Ideal Investment

New Homes Are the Ideal Investment

Cheap real estate can yield great cash flows for investors. However, it’s important to analyze key financial criteria before purchasing. New construction homes offer many benefits that aren’t available in older houses. These include elegant laminate floors, modern construction designs, and new appliances and systems.

Less Maintenance

Brand new homes offer a fresh start. This is the first time anyone else has used the shower, cooked in the kitchen or dinged their furniture on the walls of your new property. This means fewer maintenance costs, which can quickly increase in older properties. In addition, cheap homes for sale in Iowa Colony, TX, are up to code and adhere to strict safety regulations, so you can rest assured your property is safe. This can save you money on insurance rates, reduce maintenance bills and potentially eliminate costly renovation projects.

Modern home building is also focused on energy efficiency, so you can expect your new house to have better insulation and higher-efficiency appliances. This makes it easier to keep your home warm in winter and cool in summer. In addition, new homes can be more spacious than pre-owned options, with flowing, open floor plans and tall ceilings that make them feel more expansive.

Less Competition

New homes usually come with energy-efficient features that save homeowners money over time. These include solar paneling, low-use or energy-efficient appliances, and upgraded insulation and HVAC systems. This means that investors can sell these properties at higher prices. Moreover, many new homes are built in master-planned communities with amenities like swimming pools, parks, and trails. This makes it easier for investors to find tenants in the neighborhood, making the home more appealing. As such, investors should search for cheap new homes for sale during the winter when competition is less intense. While the summer months see a rush of people looking to buy houses, this can lead to bidding wars and higher prices.

Better Long-Term Appreciation

One of the most important things to consider when investing in real estate is how much it will appreciate over time. If you buy an inexpensive property, it can yield great cash flows while still being affordable for renters, and if you hold on to it for the long term, you’ll likely see significant gains in its value. New homes for sale tend to be more expensive than existing homes on the market, but they’re often worth the investment. If you look at their construction costs and factor in 2020 labor rates, they’re less expensive than purchasing an existing home that may require a significant repair bill.

Additionally, they’re often more energy efficient than older properties since they’re new. Plus, they’re new means you won’t have to deal with costly repairs and maintenance issues such as leaky roofs or old HVAC systems like their previous owners might have had to. This can lead to savings in energy bills and a quick return on your investment. You can further increase your chances of good appreciation by focusing on neighborhoods with historical increases in home values and working with real estate agents and other professionals who can provide comparable property appreciation data.

Better Location

In real estate, as in life, location is everything. You want to avoid buying a property in an area with poor schools, high crime rates, or not much to do for fun. These properties will appreciate slowly, and you’ll need help finding tenants. New construction homes are usually located in desirable neighborhoods and close to the best amenities homebuyers crave. These more unique properties also tend to come with energy-efficient features that can save a homeowner money on their monthly electric, gas and water bills. On the flip side, older homes are stuck with whatever aesthetics were in style when they were first built, and it could cost a lot to get rid of that purple bedroom with the stenciled horse border or golden swan faucets. In addition, older homes might have some expensive repair issues that you’ll need to take care of right away (leaky roofs and inefficient HVAC systems can cost a fortune). With cheap new homes for sale, you won’t have to worry about this type of costly maintenance.

Better Value

New homes typically have a warranty and are built with more modern and energy-efficient features to save the owner money on utility bills. In addition, new construction can be a better value than resale property, especially if it is located in a desirable area with good schools and easy access to major roadways and public transportation.

Better Appreciation

If you plan on buying a home and want it to appreciate, consider purchasing new construction. Investing in this type of property offers better appreciation, low to no maintenance costs, and a plethora of design options. Bigger isn’t always better: Several studies have shown that smaller homes tend to appreciate more. Plus, many buyers want to downsize from their large homes to smaller properties, especially those with desirable features such as walk-in closets and a cozy kitchen. Other factors also contribute to home price appreciation, including the neighborhood, location and school quality. For example, a home within ten blocks of a subway station typically sells quickly. Homes located near top-notch schools have also been shown to appreciate at 7.2% a year. Ask about expected timelines and building delays when investing in a new build. Also, remember that brand-new houses have a different history of property taxes and appraisals than older properties, so it’s important to perform a competitive market analysis before making your final purchase decision.

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About the Author: Katherine

Katherine is a passionate digital nomad with a major in English language and literature, a word connoisseur who loves writing about raging technologies, digital marketing, and career conundrums.

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