One of the many factors creating low inventory is the lack of new housing in California. In Sacramento, that may change soon as city leaders prepare to create more housing.
What does this mean for property investors looking to build a portfolio of rentals? Investors have an entirely different set of concerns than first-time homebuyers, and that's no different when looking at new construction homes.
We're here to talk about the pros and cons of buying off-plan homes in new-build neighborhoods. Read on to find out if buying a new property is the right move for a Sacramento property investor.
Do New Construction Homes Cost More?
Investors and traditional buyers alike tend to assume that a new construction home will cost more than an existing home. In the past, this was almost always the case. Now, it's more feasible than you'd think to buy new construction for less.
This may be even more true for investors. When you're not buying for yourself, you probably don't have a list of must-haves. You can buy the most basic layout at a lower price and still attract renters.
Are There Drawbacks of Buying Off the Plan?
When you're buying a house "off the plan," you're buying a property that hasn't been built yet. There are some inherent risks, here.
For example, this can create a considerable delay between your investment and your return. Plus, the final product may come with issues you weren't anticipating, especially if the builders hit roadblocks or don't deliver on their promise.
Is New Construction Appealing to Renters?
Is there any reason to choose new construction over existing properties as an investor? New homes in Sacramento may hold some appeal for renters, especially those looking for a bit more luxury.
That said, make the same considerations you would when buying existing properties. Is the community safe, close to good schools, and located near amenities like grocery stores and hospitals? The more attractive the location, the more attractive the property will be to renters.
Are New Homes in Sacramento Easier to Manage?
While we're sharing Sacramento real estate tips, it's worth mentioning that a lot of local properties are getting old. That can lead to more maintenance at a higher cost.
In theory, new construction won't require much maintenance right away, allowing you to recoup more of the investment faster. However, you'll still need to employ smart property management strategies to create good tenant relations and secure more lease renewals.
PMI American River Has Answers You Need
Buying new construction homes off the plan can be a surprisingly accessible way for investors to expand their Sacramento portfolio. However, you should still make the same considerations you would when buying existing properties. Make sure you're buying in an appealing area and that you have a plan for long-term management.
Looking for ways to turn your new property into passive income? PMI American River provides the newest rental technology with human expertise to maximize investor profits. Contact us and learn more about our approach that leaves tenants and owners happy.
