Why New Construction Homes are Outperforming Older Homes and the Market
Summary
This article from BiggerPockets advocates for investing in new construction rentals over older homes, highlighting their lower maintenance costs, higher rent potential, and longer tenant retention. Hosts should consider the benefits of new construction, particularly in growing markets, for a more scalable and profitable STR business.
Key Insights
- •New construction builds often qualify for attractive financing programs, with lower interest rates, longer terms, and special incentives.
- •Tenants tend to stay longer in modern, energy-efficient homes, leading to fewer turnovers and less money spent on cleaning and re-leasing.
- •New construction rentals often have lower maintenance costs due to builder warranties covering major systems for years, and can command higher rents due to modern features and energy efficiency.
Action Items
- ✓Consider investing in new construction rentals, especially in growing markets, to potentially benefit from lower maintenance, higher rent, and longer tenant retention.Effort: highImpact: high
Tools & Resources
- →Rent To Retirement: Visit Rent To Retirement to explore new-build opportunities in high-growth markets.(renttoretirement.com)
Common Mistakes
- ⚠Failing to consider the long-term maintenance costs and potential for tenant dissatisfaction associated with older properties can negatively impact profitability.
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