When getting into real estate investing is it better to buy new construction, fix up homes to rent yourself or something else?
New construction developments are taking off again as home builders push back into the market. Unleashing a flurry of projects shiny new sky scraping condos are going up as well as luxurious new single family homes. In some select markets these are especially hot items and are reportedly selling like hot cakes but are they really good for real estate investing? They can certainly feel good to own, and there may be some opportunities for appreciation for those that get in early enough, but while they may also catch the eye of renters it is important to be wary of buying at the top of the market (or above), calculate vacancies with so many other new units going up, be aware of rules prohibiting rentals and calculate the true ROI on your investment versus other options.
Many new to real estate investing, inspired by reality TV shows like ‘Flip This House’ instinctively turn to attempting to acquire run down foreclosure homes to rehab and fix up themselves. There is certainly a lot of profit to be made from this real estate investing strategy but it does come with its share of sweat and toil.
In contrast, a third option that may often be best suited to those new to real estate investing that don’t want to get their hands dirty, yet expect consistent income with little time put in and less risk is buying recently remodeled rental homes. This can provide the best of both worlds. It can mean still acquiring fantastic looking properties for less than comparable newly built homes and attracting the best tenants while dramatically reducing risk, requiring less cash out of pocket and removing the reliance on guess work.
Which types of investment properties are you most attracted to?
