New Build Property

Good and Bad Reasons to Buy New Build Property as an Investment

Whether you choose overseas investment property or prefer to make property investment choices closer to your own locale, you have the option of pre-owned property or new build property. Many investors prefer pre-owned property because they believe that the price is likely to be lower, particularly if it is distressed or discounted property in question. However, it is also true that property developers may be able to make the investor a great price agreement on property that is just being built. In addition to the cost factor, the location, color and style options and others can help to shift the choice in one direction or the other.

Cost

New build property can be an excellent way to save money on the purchase of investment property. Because property developers, particularly those who build spec homes, are often on a limited budget, it is important for them to turn over the new construction units before completion in order to maintain a healthy cash flow picture.  In order to do so, developers will often substantially reduce the price of model homes and even of pre construction homes in order to keep the income level up while additional units are built. 

Style and Color Options

Another reason to choose new build property over pre owned property is because there is likely to be some opportunity to select the colors of paint, siding, roofing and other features in the house.  The style of the property may be somewhat flexible if the choice is made early enough in the process. Even if the property selected is through the efforts of a property investment club, the group knowledge may help to make better choices. There is no doubt that color makes a difference in the curb appeal of a property and taking advantage of this fact can help increase the growth of equity funds.

Location

New build property tends to be located in areas that are popular with buyers so that there is some level of draw just because of the location.  With everything in the new subdivision or project fresh and well planned, choosing property of this type makes for the likelihood that it can be resold or rented as part of the investment opportunities. New building projects for overseas property means that all the latest appliances and accouterments are to be found in the property. In some overseas locations, new construction may be the only way to get the features desired in the property.

Terms

Another reason for purchasing new build property is that you may be able to find better terms when you buy directly from the developer.  A popular plan is for the builder to offer a lease purchase arrangement for the property in order to collect cash on the project. Other terms might provide for lower interest rates, or limited credit checks.  The developer is concerned with getting families moving into the new homes in order to boost further sales in the area. Offering new construction as discount property is a marketing ploy that makes good sense.