As stated by experts in the real estate industry, the rising trend in the year 2023 is to invest in buy-to-rent properties. Top investors from the industry are investing in ready to move in properties to generate passive income on a monthly basis. Additionally, this type of investment offers incremental capital growth as it augments at regular intervals. Despite a drop in the national economy and stock market crisis, property prices are observed to ascend on the graph.
Let us look at the benefits of investing in new build properties in detail.
- Instant capital returns – As soon as the required paperwork is done, the investor can start looking for interested tenants. New build properties are well finished with all the basic requirements that include electricity, water supply and cooking gas supply; some of them are fully furnished with all the needed white goods installed and tested. So the investors can start earning returns on their investments instantaneously. It is suggested to start the process of looking for tenants before the completion of the initial process so that instant returns can be acquired.
- Better energy performance – While this feature may seem to be beneficial for the occupants of the property, it is beneficial for the investor as well. In the current times, sustainability is a thing. Many builders are following sustainable construction methodologies and are making it a selling point for investors. According to the data, new build homes are much more sustainable and energy efficient than the old properties. For the investor, energy-efficient properties don’t require additional expenditure for adding extra features. In the coming time, new regulations are going to be implemented in which the landlords would be needed to work on increasing the energy efficiency of their properties.
- Property chain stress is avoided – New build homes come stress free for the buyers as the property chain stress is eliminated. If a property is already occupied by someone, the new buyer may have to wait until he secures another place before vacating the property and forwarding the possession to him. This is known as a property chain and in big cities, finding a property takes a lot of time. Thus, there is a situation of dependency created between the seller and the buyer. On the other hand, when buying new build homes, this stress is eliminated as the possession is handed over fast and the buyer can lodge whenever he wants. This is yet another reason for buyers to prioritise a new property over a pre-owned one.
- Discounts and incentives – Builders and developers often start making announcements for the property while the construction work is still going on. As the under-constructed properties are available with various discounts and incentives, it is the best time for the investors to make the deal. Although the risk involved in such deals cannot be side lined, the property prices will certainly rise upon completion. Investors can perform investigations on the under-constructed property and step forth to get huge discounts and promising returns.
Risks and Disadvantages of New Build Homes Investments
The new build homes would always be much more expensive than pre-owned properties. However, the price difference can be justified. New properties utilize the latest trends and follow green construction strategies. Also, buyers have a certain inclination toward new build properties as compared to older ones for the pleasure of being the first owner.
While investing in a new property is a profitable deal, it is important to investigate the quality of work before investing. By examining the quality and reviews received from the other projects constructed by the company, the construction quality can be ascertained. In many cases, low quality material has been found to be used in structures for cost-cutting. At first, everything may seem normal but with time, certain defects may appear. This will add maintenance costs to the property. In such a situation, property surveyors may come for the rescue. Investors may contact professionals who can perform various quality checks to ensure the quality of the material used and the fabrication methods followed.
Investing in new build properties come with various benefits, however, it is important to consider all the important aspects before investing.