{"id":181028,"date":"2025-02-12T15:34:49","date_gmt":"2025-02-12T22:34:49","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=181028"},"modified":"2025-02-21T10:30:22","modified_gmt":"2025-02-21T17:30:22","slug":"new-construction-is-a-winning-strategy-in-2025","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/new-construction-is-a-winning-strategy-in-2025","title":{"rendered":"6 Reasons Why New Construction is Winning This Year"},"content":{"rendered":"\n<p><span data-preserver-spaces=\"true\">In today\u2019s rapidly evolving real estate market, new construction rental properties are emerging as the clear choice for savvy investors. Rising maintenance costs, inflated insurance premiums, and escalating material expenses make older homes less appealing to landlords and tenants. Meanwhile, modern, energy-efficient homes meet tenant expectations while providing landlords with reduced operational costs and higher long-term returns.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Our partners at Rent To Retirement specialize in helping investors navigate these challenges and capitalize on the growing demand for <a href=\"https:\/\/www.renttoretirement.com\/\" target=\"_blank\" rel=\"noopener\">new construction rentals<\/a>. Let\u2019s dive into the data and why this trend reshapes the rental property landscape.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">1. Maintenance Costs: Why Older Homes Are Draining Your Budget<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Maintaining older properties is becoming increasingly expensive. Systems like HVAC, plumbing, and electrical wiring often require costly repairs or replacements, especially in homes over 30 years old.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">According to the National Association of Home Builders, homes built before 1960 incur annual maintenance costs averaging 8% of the home\u2019s value, compared to just 2% for homes built in the 2010s (<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/homekeep.com\/learning-center\/the-truth-about-the-annual-cost-of-home-maintenance\/?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">HomeKeep<\/span><\/a><span data-preserver-spaces=\"true\">).<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">How new construction helps:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">Modern materials and systems require fewer repairs.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">New builds often come with warranties covering significant components for up to 10 years.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Reduced maintenance translates to higher profitability and less time spent managing repairs.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">2. Insurance Premiums: A Hidden Cost of Older Homes<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Insurance companies charge significantly higher premiums for older homes due to their increased risk of damage. The average premium for a <\/span><span data-preserver-spaces=\"true\">home<\/span><span data-preserver-spaces=\"true\"> older than 30 years is 75% higher than that for a newly constructed home (<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.thezebra.com\/homeowners-insurance\/policies\/insurance-for-older-homes\/?utm_source=chatgpt.com\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">The Zebra<\/span><\/a><span data-preserver-spaces=\"true\">).<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Why new builds are cheaper to insure:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">Compliance with modern building codes reduces risk.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Disaster-resistant features like hurricane windows and reinforced roofing lower premiums.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">New homes are less prone to fires, floods, and structural failures, keeping insurance costs manageable.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">3. Tenant Preferences: Modern Amenities Matter<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Tenants are becoming increasingly selective about where they live. <\/span><span data-preserver-spaces=\"true\">According to <\/span><span data-preserver-spaces=\"true\">a <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.rclco.com\/publication\/rclco-2023-renter-consumer-preference-survey\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">RCLCO<\/span><span data-preserver-spaces=\"true\"> survey<\/span><\/a> <span data-preserver-spaces=\"true\">in<\/span><span data-preserver-spaces=\"true\"> 2023, 37.3% of renters stated they would be willing to pay more for new kitchen appliances, while <\/span><span data-preserver-spaces=\"true\">an additional<\/span><span data-preserver-spaces=\"true\"> 50.7% indicated they might consider paying higher rent for them.<\/span><span data-preserver-spaces=\"true\"> Outdated layouts, inefficient systems, and cosmetic wear and tear in older homes drive tenants toward new construction.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">What tenants want:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">Energy-efficient appliances and systems that lower utility bills.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Open floor plans and modern designs.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">A move-in-ready experience with minimal maintenance issues.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">New construction properties can command higher rents and maintain lower vacancy rates by offering what tenants demand.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">4. Rising Construction and Replacement Costs<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The cost of materials for repairs and renovations has soared. New construction has had to deal with the exact cost increase, but renovation projects have become even more costly, equating the time value of money.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">New construction advantages include:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">New properties <\/span><span data-preserver-spaces=\"true\">are built<\/span><span data-preserver-spaces=\"true\"> with durable, standardized materials that are easier and cheaper to maintain.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Investors avoid the costly, time-consuming process of renovating older homes.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">5. Insurance Challenges in High-Risk Areas<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Insurance premiums have become a significant hurdle for landlords in many regions like Florida and California. Insurers are scaling back coverage or exiting markets entirely due to increased natural disaster risks. According to Reuters, some homeowners in Florida saw premiums increase by over 60% from 2019-2023. (<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.reuters.com\/world\/us\/florida-homeowners-fear-soaring-insurance-cost-after-hurricanes-2024-10-17\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Reuters<\/span><\/a><span data-preserver-spaces=\"true\">).<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Why new construction is resilient:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">Built to withstand natural disasters with hurricane-proof windows and elevated foundations.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Lower insurance costs and reduced risks make these properties more viable for long-term investments.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">6. Energy Efficiency: A Win for Landlords and Tenants<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Rising energy costs are driving demand for energy-efficient homes. Investing in new construction homes offers significant energy savings compared to older homes. According to the U.S. Department of Energy, <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.energy.gov\/energysaver\/leed-certified-homes\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">LEED-certified homes use 20% to 30%<\/span><\/a><span data-preserver-spaces=\"true\"> less energy than non-green homes, with some homes achieving up to 60% savings. <\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Benefits for investors:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">Attract environmentally conscious tenants.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Qualify for tax incentives and rebates.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Reduce operational expenses over the long term.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Invest in New Construction for Long-Term Success<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">From lower maintenance and insurance costs to tenant demand for modern amenities, new builds offer a strategic edge in today\u2019s challenging market. Whether you\u2019re a seasoned investor or just starting your journey, new construction rentals provide a path to profitability and peace of mind.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Ready to explore your options? Contact <a href=\"https:\/\/www.renttoretirement.com\/\" target=\"_blank\" rel=\"noopener\">Rent To Retirement<\/a> today to find the perfect investment property tailored to your goals.<\/span><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In today\u2019s rapidly evolving real estate market, new construction rental properties are emerging as the clear choice for savvy investors. Rising maintenance costs, inflated insurance premiums, and escalating material expenses [&hellip;]<\/p>\n","protected":false},"author":613755,"featured_media":181030,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-181028","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-trends"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/181028","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613755"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=181028"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/181028\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/181030"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=181028"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=181028"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=181028"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}