Looking At a New Home Build as an Investment Property

Homebuyers are currently looking at the Calgary real estate market with renewed interest. The option to build a new home that fits your current needs and will be easy to sell for a profit when you decide to move is too enticing to pass up. In this post, we will discuss these specific benefits of building a new home and using it as an investment property – one that you can call home.

What Are My Options?

The traditional approach to buying real estate as an investment property is to find an undervalued home, buy it, move in temporarily, fix it up or add improvements, and then sell it for a higher price. The idea is that you buy the house and then increase its value, giving you the opportunity to make a profit.

It is also possible to rent the house out, giving yourself a stream of income over time rather than one lump sum from the sale. What many people don’t realize is that building a new home is another viable way to acquire an investment property that you can live in and has several unique advantages.

Value

The first and most obvious advantage is that the home will be more valuable. Unless you come across a historical house with antique appeal, a newer home has better amenities, better construction, and a more contemporary design. All of these things have a significant effect on the price of the home. That means you can sell it later on for more money.

Examples of these amenities include a more appealing design from an aesthetic perspective, better energy efficiency, plumbing that adheres to current building codes, new wiring, and so on. There are many features you can add during the build process, and they can make your home more attractive to buyers. You also have access to all of the new community amenities around you, which is another appealing selling point.

Time

You should take note that building a new home allows you to sell it at a better price when you decide to move. A newer home that brings in a lot of potential buyers is likely to sell faster, and that’s a big advantage.

You do not want to hold onto the house longer than you need to, and it is easier to control the timing of the sale. Older houses can sit on the market for an extended period of time, leaving you and all your cash locked in until a sale is made. This can also force you to lower the price to attract buyers, which jeopardizes your profits.

Convenience

You also need to consider the convenience factor. The older a home becomes the more maintenance, upkeep, and upgrading you need to do before you can truly enjoy it. This also increases the cost of your investment and there is no guarantee that your upgrade efforts will pay off if you list it three to five years from now.

This is much less of a concern when you choose to build an investment property. Maintenance issues are unlikely because everything is brand new. You get to enjoy a home that holds it’s value while you live in it, and can easily get more than your purchase price back as the community continues to grow.

Peace of Mind

Building new also means you know more about the house. When you buy an older home, even though you do a home inspection you can never be quite sure that you know the condition of the underlying structure as well as you would like.

One huge advantage of a new home build is that there are multiple inspections done throughout the process to ensure that it meets all of the safety and structural guidelines. There is also a mandatory warranty offered by all home builders in Alberta.

Having this safety net around your purchase makes the decision to buy an investment property that much easier. You know exactly what condition your new home is in, what it is made of, and if there are any concerns related to the materials or the placement of the house on its lot. This will enable you to price the home more easily and instill buyer confidence.

The bottom line is that in most cases, a new house is a better house. They present an excellent investment opportunity because you know exactly what you are getting and you can translate the higher quality into a better price on the market when it comes time to sell. It is a way to create your own opportunities and turn them into some significant gains.

Think of it from the buyer’s perspective. You would certainly rather see a seller who has lived in the home and provided oversight through the whole build process, rather than someone who built the home in a rush to make a quick profit. Your involvement is what will ultimately make these homes more attractive and if you follow the tips in this post, you’ll be able to make the most of this opportunity.