{"id":181705,"date":"2025-03-19T14:58:06","date_gmt":"2025-03-19T20:58:06","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=181705"},"modified":"2025-03-19T14:58:09","modified_gmt":"2025-03-19T20:58:09","slug":"how-you-can-save-up-to-20-percent-on-new-construction","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/how-you-can-save-up-to-20-percent-on-new-construction","title":{"rendered":"How to Save Up to 20% on New Construction Homes"},"content":{"rendered":"\n

In real estate, timing is everything. Right now, builders across the country are sitting on excess inventory, offering some of the most attractive discounts we\u2019ve seen in years\u2014up to 20% off properties, plus additional incentives like rate buydowns, price reductions, and managerial credits worth tens of thousands of dollars.<\/span><\/p>\n\n\n\n

If you\u2019ve been waiting for the right moment to invest, this could be your golden opportunity. The issue is that not every buyer can negotiate these types of deals, and they need a partner like Rent To Retirement to <\/span>help find the best deals<\/span><\/a> in today\u2019s ever-changing market.<\/span><\/p>\n\n\n\n

Why Are Builders Offering These Discounts?<\/span><\/h2>\n\n\n\n

At first glance, a surplus of new construction homes might sound like a red flag. But savvy investors see the hidden opportunity. Here\u2019s why builders are making these deals\u2014and how you can benefit:<\/span><\/p>\n\n\n\n

Affordability challenges have slowed retail <\/span>demand<\/span><\/h3>\n\n\n\n

Rising interest rates and inflation have priced many individual homebuyers out of the market. With demand cooling, builders are eager to move properties off their books. Instead of waiting for the perfect retail buyer, they\u2019re willing to negotiate with investors\u2014offering deep discounts and attractive financing options.<\/span><\/p>\n\n\n\n

Builders need to keep construction <\/span>moving<\/span><\/h3>\n\n\n\n

Homebuilders work on large-scale projects, and financing <\/span>is tied<\/span> to progress. If homes sit unsold, it disrupts their cash flow. Builders offer discounts to investors who can buy in bulk, like Rent To Retirement, or close quickly to maintain momentum, creating a win-win scenario.<\/span><\/p>\n\n\n\n

Institutional buyers have slowed <\/span>down<\/span><\/h3>\n\n\n\n

In recent years, significant funds and institutional investors dominated the build-to-rent space. However, many have temporarily pulled back, leaving builders with additional supply. Instead of waiting for Wall Street to return, they\u2019re shifting focus to individual investors willing to capitalize on negotiated wholesale pricing.<\/span><\/p>\n\n\n\n

The Investor Advantage:<\/span> What Makes This a Unique Time?<\/span><\/h2>\n\n\n\n

The best deals are going to buyers like <\/span>Rent To Retirement<\/span><\/a>, who are buying in bulk in grade-A markets and have the experience in stacking opportunities to bring in the highest returns for investors. <\/span><\/p>\n\n\n\n

As Warren Buffett said, \u201cBe greedy when others are fearful.\u201d While many sit on the sidelines, those who act now can lock in properties below market value and create instant equity. <\/span><\/p>\n\n\n\n

Here\u2019s how:<\/span><\/p>\n\n\n\n

Buy below market value and force <\/span>equity<\/span><\/h3>\n\n\n\n

Builders are selling at discounts, allowing you to buy at 15%-20% below market value. For example, if a home typically sells for $300,000 but you negotiate a 20% discount, you\u2019re purchasing at $240,000\u2014instantly securing a 15%-20% equity position.<\/span><\/p>\n\n\n\n

Creative financing: Interest rate buydowns and credits<\/span><\/h3>\n\n\n\n

Builders offer rate buydowns in the mid-to-high 3% range, dramatically improving cash flow. Some deals include managerial credits up to $40,000, reducing out-of-pocket costs.<\/span><\/p>\n\n\n\n

Tax incentives and bonus depreciation<\/span><\/h3>\n\n\n\n

New construction offers significant tax advantages, including bonus depreciation, allowing investors to write off significant portions of their investment upfront. Talk with your CPA to see what type of benefits you can get.<\/span><\/p>\n\n\n\n

Low-maintenance, high-quality tenants<\/span><\/h3>\n\n\n\n

New builds come with warranties, minimal capital expenditures (capex), and modern features that attract high-quality tenants\u2014resulting in fewer repairs, less turnover, and better rental income stability.<\/span><\/p>\n\n\n\n

The Build-to-Rent Advantage<\/span><\/h2>\n\n\n\n

The Build-to-Rent (BTR) model offers an alternative path <\/span>for those looking<\/span> for a hands-off approach. Builders are partnering with national and regional lease management companies, allowing investors to purchase new homes integrated into a professionally managed rental system. <\/span>This<\/span> provides:<\/span><\/p>\n\n\n\n