When buying up single-family rental properties in Tempe, there will be pros and cons to choosing a newly built home. While brand new properties provide modern updates like fashionable interiors, higher energy efficiency, and less need for repairs in the first few years, all of this stuff may charge you more upfront. This is correct not only because upgrades aren’t cheap, but because there is ordinarily very little room to negotiate on price. Nonetheless, which property you choose, it’s pertinent to weigh all of the pros and cons carefully to make sure that you’re getting a good return on your investment.
To some degree, buying a new home to use as a rental property can be a good investment. From a cost standpoint, new construction gives investors the opening to deal and outright rent out a pristine, endearing rental home with a range of attractive upgrades. Given that the upgrades are included in the purchase price, there will be little if any out-of-pocket repairs and improvements to get the property ready for your first tenant.
If the new house is available for move-in, rental income can begin right away. Included in the price of a new home are also many upgrades that can aid investors in customizing the rental home to meet the desires of a particular renter demographic. For example, a new home that has been upgraded with smart technologies will be more attractive to a Millennial renter than one that isn’t.
Tenant appeal is an invaluable consideration 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 settled in the home. A new property also provides renters significant utility savings, because of the fact that firsthand households are likely to have higher energy efficiency throughout. Tenants eyeing to stay long-term may be predominantly fascinated by these structures, and by the likelihood of relishing a modern, low-maintenance, energy-efficient home for many years to come.
While these are all compelling reasons to invest in a new home for your next rental property, there are hitches to consider as well. For instance, it’s essential to think of that not all builders are equal and that some may utilize cheap materials or try to cut corners to save money.
Obtaining shoddy construction can bring about 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 thing on the shady deal side of things is the often-limited number of options available. Even if customization is likely to a degree, it is time and again 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 adores a good bargain, buying a new home may not be the decision for you. This is for the reason that the price of new construction isn’t permanently deduced by the market or a previous owner, usually leaving some 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. Of course, this condition may be dependent on the settings, and it’s always a decent idea to ask for any available discounts or other financial incentives.
It is significant to consider all the pros and cons before electing to buy a new home to use as a rental property in Tempe. But with so much to reflect, it can be tough to distinguish whether a firsthand property is the right investment for your market and demographics.
You need complete market statistics, like the type of perks given to all property owners operating with Real Property Management East Valley. 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 480-981-7000.
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