Building New Construction Investment Rental Home vs Buying Old Invesment Rental Home

Pros for New Construction Investment Rental Home

  • Everything's new - lower maintenance costs
  • Less phone calls from tenants about maintenance
  • Higher than Average Rent
  • Shorter Vacancies - Rent Faster
  • Tenants will be happier and stay longer
  • Newer home will be worth more when sold
  • Lower insurance costs due to newer, more stringent building codes
  • Lower liability from hidden problems, unpermitted improvements by past owners of older homes
  • Lower Vulnerability to Hurricanes - Less potential repair costs from damage or lost rent
  • Don't have to deal with hiring and managing multiple contractors to do a fixer upper
  • Don't have to come up with cash out of pocket for repairs after closing
  • More Energy Efficient - Less Environmental Impact
  • Sustainable Building Practices - Less Environmental Impact vs other builders
  • Adding much needed Affordable Housing Inventory into the marketplace
  • No more tours of old house after old house looking for a deal
  • Buy vacant lots remoltely, even from another state
  • Cons

  • Higher square foot price than older home
  • Could take longer to build than to buy an already fixed up older home


  • Investing in Rental Real Estate vs Stock Market

    Pros

  • Diversification
  • Leverage: With a $75,000 investment and a mortgage you have a $250,000 asset that is appreciating
  • Tenant Pays off your mortgage for you - increasing your equity
  • Asset increases in value over time
  • Asset depreciation, Mortgage Interest, Maintenance are all expenses that off-set rental income and potentially other W-2 income
  • Potentially write off trips to Florida to manage Rentals
  • Cons

  • Tenants
  • Toilets
  • Taxes
  • Yes, it's more work than stocks, but it pays off in the long run like no other investment