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Pros and Cons of Investing in a New Home for a Houston Rental Property

Houston Rental Property with a “For Rent” Sign in the Front YardWhen obtaining single-family rental properties in Houston, there are always a couple of pros and cons when choosing a newly built home. While newer properties extend perks like personalization, higher energy efficiency, and less upkeep in the early years to come, the whole thing may cost you more added expenses up front. This is oftentimes not only because upgrades aren’t cheap, but because there is generally very little room to negotiate on price. But despite which property you buy, it’s critical to weigh all of the pros and cons carefully to establish that you’re picking up a good return on your investment.

In large part, buying a new home to use as a rental property can be a good investment. From a cost standpoint, new construction extends investors the opportunity to purchase and swiftly rent out a sanitized, captivating rental home with a range of attractive upgrades. Since the upgrades are included in the purchase price, there will be small if any out-of-pocket repair and improvement expenses to have the assets ready for your first tenant.

Supposing the latest house is now organized for move in, rental income can begin quickly. Included in the price of a new home is also an assortment of upgrades that can benefit investors since the rental home is customised to charm a particular renter demographic. For instance, a new home that has been upgraded with smart technologies is more enticing to a Millennial renter than one that is not.

Tenant appeal is a critical factor in any successful rental property and new homes offer renters something older properties cannot: the chance to be the first and only tenant who has resided in the home. A new property also suggests to renters significant utility savings, considering that brand new homes generally have higher energy efficiency throughout. Tenants planning to stay long-term may be distinctly enticed by these facets, and by the anticipation of relishing a modern, low-maintenance, energy-efficient home for years to come.

Despite the fact that these are all compelling reasons to invest in a new home for your next rental property, there are a number of dilemmas to review as well. Perhaps, it’s critical to recognize that not all builders are equal and that some may use cheap materials or try to cut corners to save money.

Getting shoddy construction can result in endless haggling with the builder to try and get things done correctly, as well as higher repair and maintenance costs if you can’t get them to do the work the right way. One more thing on the scam side of things is the often-limited number of options available. Even though customization is possible to a degree, it is more likely a matter of choosing between a very limited set of wall colors, countertop styles, and so on, or risk driving the purchase price up even higher.

Also, if you are an investor who likes a good bargain, buying a new home may not be the best choice for you. This is due to the fact that the price of a new construction isn’t always ascertained by the market or a previous owner, constantly leaving little room for negotiation.

If you’re buying from a builder, they may not be as open to negotiation due to the fact that lowering the base prices on their homes alters the data on comparable properties in the neighborhood and encourages future buyers to attempt to negotiate with them as well. Granted, this circumstance may adjust based on the situation, and it’s always a good practice to ask for any available discounts or other financial incentives.

It is critical to study all the pros and cons before electing to buy a new home to use as a rental property in Houston. But with so much to ponder, it can be tough to recognize whether an innovative property is the right investment for your market and demographics.

You want to complete business assessments, such as the type of service given to all property owners working with Real Property Management Heritage. We perform market assessments for all potential rental properties, ensuring that owners who partner with us have the tools and information they need to make the best possible investment decisions. For more information, contact us online or give us a call at 832-701-0766.

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