Is Buying Into New Construction a Good Investment for Me?

A question that I get very often is whether new construction is a good investment. As with all long-term investments, buying into new construction comes with its benefits and drawbacks. What they are, depends on a few factors.  

A look at these factors will help you make a decision that fits into your circumstances and future. 

3 Factors that affect your home's value

The value accumulates

A newly constructed home is priced according to current labor rates and market values. Therefore the upfront cost is much higher when compared to an older home. 

The advantage is obvious - owning a brand new home that does not have a carry-over of past problems, and is customized to your choosing. In addition, all systems and appliances come with warranties, some of which are for ten years! This translates into longer-term savings in maintenance and repair costs. 

Ready for the commitment? 

Buying the home for a long-term purpose, such as renting it out or intending to live there for the long term, means that its value will overtake the initial higher cost. Owning the home for a few years is key to letting the value overtake its initial high cost. 

If it is likely that you will be selling again in a relatively short time, new construction is not the way to go. 

Check customization! 

It's fantastic being able to customize to your heart's content. Just be aware that it adds up quite fast. So be careful of a level of tailoring that pushes the cost way over the home's value.  

Also, mind how trendy you go. Going for a high level of personalization means that you have a much smaller chance of selling. You might even have to spend money on making changes when the time comes to sell. And there goes your value! 

Timeless beauty is vital. A few unique touches here and there are acceptable, such as a pretty backsplash. Instead, add personal touches with furnishings and decoration to be safe, and you won't have to take out the big money when fads pass and become unsightly. 

Strategies and Risks

Keeping an eye on Neighborhoods and amenities can provide you with a good idea of the value of your investment. For example, if there are excellent schools, shops, and developing businesses, it indicates that the neighborhood is popular, meaning your home will evaluate better sooner. 

Developers also try to add excellent amenities, like pools, gyms, and other recreational facilities to draw buyers and encourage a sense of community. Research developments before committing. When the offerings are attractive, your chances of selling again later will be higher.  

Getting into a new development very early is also something to consider. While the project is new, prices are lower because buyers have to trust the vision and live with the disruption of construction for a while. If this is something you don't mind, buying while the price is low will help boost the result to your bank account - now and when you sell. 

Working with a Realtor will ensure that you make the best choice since we have all the resources to make researching long-term value a breeze.