If you have decided to buy single-family rental properties in Southwest Waterfront, take note of both pros and cons to choosing a newly built home. While freshly constructed properties offer benefits like more customization, higher energy efficiency, and would require lesser upkeep in the beginning, all of these things may end up costing you more up front. This is usually the case not only because upgrades aren’t cheap, but mainly what happens is that there is very little room to negotiate on price. Regardless of which property you select, it’s necessary to weigh all of the pros and cons carefully to make sure that you’re getting a solid return on your investment.
In a lot of ways, buying a new home to use as a rental property can be a good investment. Looking at everything at a cost standpoint, new construction allows investors the opportunity to acquire and immediately rent out a brand-new, attractive rental home with a range of beautiful upgrades. Because the upgrades are already covered in the purchase price, there will be little if any out-of-pocket repair and improvement costs to prep the property ready for your first tenant.
In the event that the freshly constructed home is primed and set for move in, rental income can commence soon after. Included in the price of a new home are also a number of upgrades that can let investors customize the rental home to attract to a particular renter demographic. Case in point, a new home that has been upgraded with smart technologies will probably appeal more to a Millennial renter than one that has not.
Tenant appeal is a massive determinant 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 occupied the home. A new property also allows renters significant utility savings, since newer homes tend to have higher energy efficiency throughout. Renters entertaining the idea to stay long-term may be particularly enticed by these factors, and by the notion of enjoying a modern, low-maintenance, energy-efficient home for more years to come.
Even though these are all compelling reasons to invest in a new home for your next rental property, there are plenty of downsides to think about as well. For example, it is a must to think about the fact that not all builders are equal and that there may be those who will use cheap materials or try to cut corners to save money.
Buying shoddy construction can likewise 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. Granting customization is conceivable to a degree, it is frequently 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, in case you are an investor who enjoys a good bargain, buying a new home may not be the proper choice for you. This is because the price of new construction isn’t always concluded by the market or a previous owner, often leaving room for negotiation.
When you’re buying from a builder, they may not be as open to negotiation for the reason that lowering the base prices on their homes alters the data on comparable properties in the neighborhood and encourages future buyers to make an effort and talk them down too. Of course, this situation may not be the same depending on the conditions, and it’s always a good idea to ask for any available discounts or other financial incentives.
It is essential to evaluate all the pros and cons before selecting to buy a new home to use as a rental property in Southwest Waterfront. But with so much to consider, it can be tough to distinguish whether a new property is the correct investment for your market and demographics.
You need in-depth market information, like the kind accessible to all property owners working with Real Property Management Washington DC. 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 202-813-9993.
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