Keep in mind that if you are buying single-family rental properties in Firestone, there are both pros and cons to choosing a newly built home. Despite the fact that newer properties have benefits like freedom to customize the home further, higher energy efficiency, and it would not take so much effort to maintain in the first few years, all of these things may require you to spend more up front. This is what usually happens not just because upgrades aren’t cheap, but also because there is oftentimes very little room to negotiate on price. No matter which property you pick, it’s crucial to weigh all of the pros and cons carefully to warrant that you’re getting a good return on your investment.
In more ways than one, buying a new home to use as a rental property can be a good investment. From a cost standpoint, new construction offers investors the chance to acquire and rent out a clean, nice-looking rental home with a range of attractive upgrades almost immediately. Since the upgrades are already incorporated in the purchase price, there wouldn’t be so much out-of-pocket repair and improvement expenditures to have the property ready for your first tenant.
In case the new home is readily available for move in, rental income can commence as soon as you have renters. Included in the price of a new home are also a variety of upgrades that can help investors customize the rental home to draw in a particular renter demographic. For example, a new home that has been upgraded with smart technologies will probably bring in more appeal to a Millennial renter than one that has not.
Tenant appeal is a primary reason in any successful rental property, and new homes offer renters something older properties cannot: the opportunity to be the first and only tenant who has resided in the home. A brand new property also allows renters significant utility savings, as a result of the fact that more modern homes usually have higher energy efficiency throughout. Renters who want to stay long-term may be mainly captivated by these features, and by the idea of relaxing in a modern, low-maintenance, energy-efficient home for many years to come.
Whereas these are generally compelling reasons to invest in a new home for your subsequent rental property, there are several downsides to ponder on as well. For example, it’s vital to remember that not all builders are equal and that some may take advantage of cheap materials or try to cut corners to save money.
Purchasing shoddy construction can lead to endless haggling with the builder to try and get things done correctly, as well as higher repair and maintenance costs if you can’t get them to do the work the right way. One more item on the con side of things is the often-limited number of options available. Even though customization is conceivable to a degree, it is more often a matter of choosing between a very limited set of wall colors, countertop styles, and so on, or risk driving the purchase price up even higher.
Lastly, if you are an investor who loves a good bargain, buying a new home could possibly be a bad option for you. This is because the price of new construction is not at all times circumscribed by the market or a previous owner, often leaving room for negotiation.
The minute you’re buying from a builder, they could possibly be not as open to negotiation since lowering the base prices on their homes alters the data on comparable properties in the neighborhood and encouraging future buyers to make an effort and talk them down as well. Obviously, this situation may not be the case all the time as it would also depend on the circumstances, and it’s always a good plan to ask for any available discounts or other financial incentives.
It is crucial to evaluate all the pros and cons before choosing to buy a new home to use as a rental property in Firestone. But with so much to consider, it can be hard to know whether a new property is a right investment for your market and demographics.
You need detailed market information, like the kind offered to all property owners working with Real Property Management of the Rockies. We perform market assessments for all potential rental properties, ensuring that owners who partner with us have the tools and information they need to make the best possible investment decisions. For more information, contact us online or give us a call at 970-658-0410.
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