Investing in New Construction Single Family Homes

We are now living in a new era. More and more people are choosing to rent as opposed to buying a home. Most surveys show that the number one choice for home renting is the single family home. Investing in New Construction Single Family HomesPeople of all ages enjoy the solitude a single family home offers. Landlords prefer single family homes as they tend to draw tenants that take more pride in their homes.

I know from personal experience with the many properties I have owned that people who rent do not always call their home a "home".

I have found that when people live in multifamily homes, they call that property their "apartment", while people who live in a single family home will indeed call it their "home".

I believe there is a psychological attraction to a building that they have total reign over. This leads to more pride in their homes and therefore they tend to take better care of it.

Why people rent

Baby boomers

Now that their adult children have finally flown the coup and gotten their own places, these aging parents want to rid themselves of the daily maintenance concerns and want to travel and be footloose and fancy free. They do not need their big homes anymore and choose to rent and be more transient.

Millennials

This group of people is the largest segment of the population and they too want to be transient. Millennials have the fastest growing incomes and they want to be flexible to go to where the jobs are. There is also a large group of these people that are carrying large student loans and cannot qualify for or believe they cannot qualify for a home loan if they wanted to. Together this group represents a lot of renters.

The people forced from their homes

Foreclosures and bankruptcies that occurred over the past decade forced many people from their homes and into rental living. Many of these people they have found comfort in not being strapped to a mortgage with a high balance. They have found comfort in renting.

Lack of available rental houses

With so many people wanting to rent and with such limited property available for them to do so, builders have taken notice and are actually building homes with renters in mind. Yes, we now live in an era where builders are designing and building these houses with renters as the focused occupant.

Investors can create long term investments from new construction

The new construction investor of course focuses on long-term buy and hold strategy. With new construction comes warranties and newer building codes which will provide for long term sustainability to the structure.

The key to watch for is to only buy new construction in highly owner occupied areas. Most reputable builders will only allow 10% of the properties to be sold as rental property. This is to help insure the values in the areas continue to climb as the attraction for a home buyer is to buy in predominately owner occupied areas.

Location is still top priority

When you find new construction properties in an area of great growth with job growth, population growth and an area that is considered undervalued you have a great investment.