If you’re planning to get a single-family rental property in Rexburg, then you must be prepared for the pros and cons when choosing a newly built home. While more innovative properties present gratuities like more remodeling, higher energy efficiency, and less repairs in the first few years, all of these tasks may cost you a pretty penny upfront. This is usually not just because upgrades aren’t cheap, but because there is primarily very little room to negotiate on price. No matter which property you handpick, it’s consequential to weigh all of the pros and cons carefully to assure that you’re getting the best return on your investment.
Ideally, buying a new home to use as a rental property can be a good investment. From a cost standpoint, new construction provides investors the ability to purchase and instantly rent out an appealing rental home with a range of attractive upgrades. Because the upgrades are covered in the purchase price, there will be little if any out-of-pocket repair and improvement estimate to get the property ready for your first tenant.
Granted that the new home is straightway ready for move-in, rental income can start immediately. Included in the price of a new home are also many upgrades that can guide investors in customizing the rental home to please a particular renter demographic. For instance, a new home that has been upgraded with smart technologies will expectedly appeal more to a Millennial renter than a home that has none.
Tenant appeal is a remarkable aspect in any successful rental property, and new homes offer renters something older properties cannot: the chance to be the first and only tenant who has lived in the home. A new property also gives renters significant utility savings, due to the fact that firsthand homes have higher energy efficiency throughout. Renters planning to stay long-term may be directly captivated by these landscapes, and by the promise of cherishing a modern, low-maintenance, energy-efficient home for several years to come.
Though these are all compelling reasons to invest in a new home for your next rental property, there are a number of hitches to deliberate as well. For example, it’s important to be aware that not all builders are equal and that some may obtain cheap materials or try to cut corners to save money.
Accepting shoddy construction can mean 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. Another write-up on the con side of things is the often-limited number of options available. Even though customization is doable 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.
Conclusively, if you are an investor who fancies a good bargain, buying a new home may not be the best decision for you. This is because the price of new construction isn’t always discerned by the market or a previous owner, often leaving a bit of room for negotiation.
When you’re buying from a builder, they may not be as open to negotiation because lowering the base prices on their homes alters the data on comparable properties in the neighborhood and encouraging future buyers to try and talk them down as well. Obviously, this scenario may interchange depending on the situation, and it’s always a a good habit to keep by asking for any available discounts or other financial incentives.
It is relevant to measure all the pros and cons than deciding to buy a new home to use as a rental property in Rexburg. But with so much to assess, it can be hard to know whether a fresh property is the right investment for your market and demographics.
You need in-depth market statistics, like the kind presented to all property owners running with Real Property Management Southeast Idaho. 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 208-522-2400.
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