I have some land and I would like to know if it would be a viable option to build new single family units on it to rent? Is building from the ground up comparable to buying a house and renovating it to rent out?
Investor · Columbus, GA · Member since 2014 · 2k+ posts · 1k+ votes
6y
Not including places like SFO, NYC, and D.C. it's almost always cheaper to buy and fix than to build new. This is especially true in the current market where there is a shortage nationally and you are paying to dollar for labor and materials. Just do the math for your area per square foot for similar materials. Talk to a few builders and/or appraisers to get a feel of construction costs per sq. ft. However, if there is nothing to buy in your market, then building may be the only way to get inventory.
I have some land and I would like to know if it would be a viable option to build new single family units on it to rent? Is building from the ground up comparable to buying a house and renovating it to rent out?
It all comes down to the numbers. New typically rents first and for more. Of course location, supply and demand all come into play as well.
Specialist · O'Fallon, MO · Member since 2010 · 148 posts · 46 votes
6y
I agree with Greg.
Depends on the numbers. There are lenders doing such loans as well. If the land is worth enough and you can setup your exit strategy it's quite simple to do. You could even do with no money out of your pocket.
Investor · Columbus, GA · Member since 2014 · 2k+ posts · 1k+ votes
6y
Not including places like SFO, NYC, and D.C. it's almost always cheaper to buy and fix than to build new. This is especially true in the current market where there is a shortage nationally and you are paying to dollar for labor and materials. Just do the math for your area per square foot for similar materials. Talk to a few builders and/or appraisers to get a feel of construction costs per sq. ft. However, if there is nothing to buy in your market, then building may be the only way to get inventory.
Contractor · Denver, CO · Member since 2009 · 399 posts · 166 votes
6y
Big guys are doing this in many major metros already. They are building apartment sized homes with typical new subdivisions amenities, pool, parks, gym, etc. It is unclear what the exit plan is and from the articles I've read they have options but are not clear on the exit themselves.
One option discussed includes build and hold. Another is build, stabilize and sell. Not sure if they are platting the lots for individual resale. Seems some form of condo would make the most sense.
In Denver, most build to rent that I'm aware of is in the form of multis, but I have run across many new subdivisions with rentals. In the end, it all comes down to demand and numbers.