Real estate, especially residential real estate, makes for a great addition to your financial portfolio. It's an investment that provides excellent return on income as well as providing continuous revenue year after year. Of course, there are several ways to get into real estate investments, however, pre-construction homes are one of the fastest growing opportunities today! Follow along as we discuss the benefits of investing in pre-construction homes.
One of the biggest draws to pre-construction homes is the low initial pricing based on what the property will be worth after it has finished. This allows you to place yourself in a position to make a considerable return on your investment! Depending on the terms of your contract, you may have to hold on to the property for some time after it is built but, by renting that property, you will get monthly income off your investment.
Once you decide to sell, you'll find that the market will usually have shown some appreciation, meaning your investment has paid off even more. Due to the lower prices you paid and the increasing demand for housing, your return could be much higher than if you had purchased and invested in post-construction homes.
Unlike resale homes, new construction properties come with a builder's warranty which is required by law. These warranties typically cover materials and workmanship as well as any systems work (electrical, plumbing, heating and air conditioning, etc.) for up to two years. There's also a longer warranty for major structural elements like foundations and basement walls. Unlike resale properties that can have renovations that do not meet current day building codes and may be less energy efficient/ contain hazardous building materials like asbestos or lead paint, newly constructed homes are guaranteed to be the most up-to-date!
Purchasing a pre-construction property means you get the added benefit of being able to customize the property to suit your needs. Choosing features like flooring, cabinetry, lighting, plumbing, and fixtures can be extremely helpful for investors hoping to keep their costs down while making the home as durable and appealing to future tenants as possible. You'll often find you can even choose your lot location in most new subdivisions!
New construction will always be found in emerging markets with a strong potential for growth. As a real estate investor, this is where you want to invest in order to reduce your risk and maximize long term property appreciation. Of course, you will want to be sure to do your research and study the markets you're considering. Purchasing new property in areas where employment, shopping, and other amenities are a far commute may mean you're looking too far ahead of the curve and can dampen your investment's rental prospects.
Overall, pre-constructed homes are better suited as investment property than resale homes. They are more much more energy-efficient, require lower maintenance, and can be purchased in growth markets using a small upfront investment. If you'd like to learn more about the benefits of investing in pre-construction homes feel free to reach out to us at Marina Homes.