New homes in New Braunfels, TX

9 Replies

I'm new to investing, and looking to purchase a brand new SFR home to rent out in one of the developing subdivisions of New Braunfels. What are some things I should consider when I decide on a purchase?

It's not likely you will get any equity capture purchasing a new home.  Also not likely you will even meet the 1% rule with your rents.  Why are you looking at new builds?  Plenty of good housing stock in New Braunfels that can be purchased and leased gaining you instant equity, decent cash flow and better appreciation. 

Intriguing, where would you look? I want to be in a good neighborhood that will be in a higher appreciating area when the population starts to rise. 

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I agree with Seth.  However, New Braunfels tends to have more expensive real estate.  Are you interested in something outside of that area? I just got a contract on a very clean rental closer to San Antonio.  

I was interested in New Braunfels for the lower price point and because there is a lot of development going on. But I would be open to San Antonio area.

@Brandon Kingcaid I actually live in NB and it is a more expensive market. As Seth mentioned, you aren’t likely to get any real equity on a new build. You can find a few opportunities if you look around but I’ve found the NB tends to be higher priced. You can likely get better returns on rental properties as you go towards SA. I don’t do much in NB because prices are a bit higher and thus risk and return on time and $ spent isn’t where I like to be.

@Ryan MacDonald What about in the case where I will be living on the property for one year for an FHA loan? Would it be reasonable to buy a new construction at the limit of my buying power or should I look for a smaller used duplex? Or another option is to build my own smaller duplex.

@Brandon Kingcaid I guess it depends on your strategy. If you are having to use FHA to buy a property and your mind is set in that I would probably focus on a duplex or triplex but I know local prices are pretty darn high. And with FHA, your barrier to entry is lower but you should assess the risk. If we are at the top of the market, then buying at the top with little to no money available could leave you upside down in a market correction but I suppose you can ride it out for the long term, especially if you live their. Also, depending on your current lifestyle, if you are able to rent the adjoining rooms out to friends, that improves your situation.

I’m a bit skewed in that I don’t buy anything that does not have some form of financial or title distress which allows me to capture immediate equity at the time of purchase. Buying a new build doesn’t necessarily allow for that and you are basically banking on appreciation and cash flow. If you can push up cash flow by renting one side and your spare rooms then I think that can be a viable option to live mortgage free, get some mortgage pay down and some cash. However I think any appreciation you capture will be long term. It’s possible, just slower than I like.

That being said, if you can buy something in distress or in an area that allows you to get better cash returns like a San Antonio, I think it might benefit you a bit more with less risk. It will be more work but you could see better returns faster in my opinion.

@Ryan MacDonald Thanks for that advice! It does look like I’ll need to buy in SA to keep the price lower, so I will most likely move out there and find a job first, then get started on this project.

Hi everyone. I’m kind of in the same boat. I own a rental in Live Oak, and am looking at doing a new build duplex in NB.  The build is 350k, with “projected” rents at 1460. So I’m looking at doing 30% down and rents at 1300.  I want a buy and hold. Would a new build be that bad? 

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