new construction financing

5 Reasons to Think About Investing in New Construction Homes Right Now

As of summer 2022, low housing inventory combined with huge demand has driven home prices through the roof. Furthermore, inflation has driven mortgage rates skyward, which has caused many would-be homeowners and investors to put their plans on hold – for now, anyway. Despite these challenges, new construction homes are still a strong investment. Here are five reasons to consider investing in new construction homes today. 

#1 – The Supply is More Predictable

Right now, the number of people looking for homes vastly outnumbers the number of existing homes available to them, and that’s driven prices through the roof. As such, new construction homes are steadily growing in popularity. More would-be buyers are looking to buy new construction homes, and many are looking to rent new homes until the market recovers to a point where they feel confident in buying. Finally, you get to choose how, when, and where these homes are built, so it’s simply more predictable. The better you can predict outcomes, the less risk you face. 

#2 – You Choose the Location 

When the supply of homes on the market is lean, buyers who have the ability to do so will pay far more than the asking price to secure a home that’s in a coveted location. This causes issues for investors; they need to stick to budgets to ensure that their projects are profitable. With a new build, you get to choose the location, which means you have the opportunity to find the right balance between cost and value. Land prices have also risen, but not nearly as quickly or as much as home prices. 

#3 – You Won’t Have as Many Maintenance Woes 

When you buy a pre-built home to rent out to tenants in the area, maintenance is going to be a major concern. Despite having a home inspected before you buy, there’s always that chance that something could go wrong within the first few weeks of occupancy, and that can seriously cut into your profits. When you build a new home, you won’t have to worry as much about maintenance – at least for the first seven to 10 years, anyway. Carefully selecting your tenants and making any required repairs immediately will go even further to reduce maintenance costs in the future. 

#4 – Appliances and Upgrades are Already There

One of the biggest challenges involved in investing in a pre-existing property comes from upgrading the appliances and technology. Today’s homeowners want all the bells and whistles, from state-of-the-art smart appliances to built-in home security systems and more. When you build a new house, you can include all of these things in the original cost, and this can save you money in the long run. The addition of new appliances and upgrades makes your home more desirable for renters and buyers alike, as well. 

#5 – The Warranties are Outstanding 

Finally, if you’re still on the fence about investing in new construction homes, the warranties offered by the home builders today are outstanding. In fact, many of the most popular builders offer warranties that cover the house for as long as 10 years; anything at all that goes wrong inside the house for that first decade – outside of damage caused by the buyer or the tenant – is the builder’s responsibility. Many builders will offer even longer warranties on the major parts of the home, which include the foundation, the roof, etc. Before you take the plunge, find a builder that offers a phenomenal warranty and has a good reputation for honoring it. 

New construction homes are one of the best investments to make in today’s market. With pre-existing home inventory dangerously low and prices through the roof, a new construction home is often more profitable for the investor, more affordable for the buyer, and more comfortable for the tenant.