My best cashflow this year came from new builds - it wasn't the builder I expected

San Antonio, Texas
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My best cashflow this year came from new builds - it wasn't the builder I expected

Michael GonzalesBusiness Member
Real Estate Agent · San Antonio · Member since 2018 · 32 posts · 12 votes

If you'd told me 3 years ago my best-cash-flowing rentals in 2026 would be brand-new builder homes, I wouldn't have believed you. But that's where the numbers landed for me and my investor clients this year.

Last year most of us bought from one national builder because their financing incentives were the best around. This year a different builder pulled ahead. Earlier in 2026 we were locking a 7/6 ARM at 3.875% with 25% down, with the seller covering the buydown and some closing costs (if we do 20% down then 2% seller concession max leaves a little bit of buy down to cover out of pocket in addition to closing costs). Rates have moved since, but they're still offering around 4.5%.

What it looks like on a 5-bed / 3-bath, ~1,900 sf:

  • Rent: $2,100–$2,400/month depending on the neighborhood

  • Cash flow: roughly $350 to $740/month after PITI, HOA and management, averaging around $500 (that's before vacancy and capex reserves)

What actually moved the needle:

1. Price band matters more than bedroom count. Not every 5-bed works. The ones that cash flow for us fall in a pretty narrow price range. A little above it and the deal falls apart.

2. Taxes decide which side of town wins. Our east side home cash flows about double what the west side ones do, mostly because of tax rates. Same builder, same floor plan, very different bottom line.

3. They're rent-ready at closing. Fridge, stove, washer and dryer, blinds and a garage door opener are all included. With the 1-2-10 builder warranty, maintenance is close to zero for the first couple of years - it has come in clutch for some clients (whereas clients that bought resale would have to cover that out of pocket which eats into our profits)

4. Market it before you close. I start marketing 2–3 weeks before closing. On one of these, we had applicants screened before closing and it was rented before the first mortgage payment was due - that doest always happen, but that is the goal (and most times we hit it)

5. Understand the ARM. After year 7 it adjusts so have a refi or exit plan.

Is anyone else seeing new construction beat resale on cash flow right now? And if you're weighing builders or subdivisions in San Antonio, I'm happy to compare notes on which price bands, areas and incentives are working. Feel free to DM me.

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  • Meron Bekele
    Accountant · Las Vegas · Member since 2026 · 13 posts · 6 votes
    14h
    Quote from @Michael Gonzales:

    If you'd told me 3 years ago my best-cash-flowing rentals in 2026 would be brand-new builder homes, I wouldn't have believed you. But that's where the numbers landed for me and my investor clients this year.

    Last year most of us bought from one national builder because their financing incentives were the best around. This year a different builder pulled ahead. Earlier in 2026 we were locking a 7/6 ARM at 3.875% with 25% down, with the seller covering the buydown and some closing costs (if we do 20% down then 2% seller concession max leaves a little bit of buy down to cover out of pocket in addition to closing costs). Rates have moved since, but they're still offering around 4.5%.

    What it looks like on a 5-bed / 3-bath, ~1,900 sf:

    • Rent: $2,100–$2,400/month depending on the neighborhood

    • Cash flow: roughly $350 to $740/month after PITI, HOA and management, averaging around $500 (that's before vacancy and capex reserves)

    What actually moved the needle:

    1. Price band matters more than bedroom count. Not every 5-bed works. The ones that cash flow for us fall in a pretty narrow price range. A little above it and the deal falls apart.

    2. Taxes decide which side of town wins. Our east side home cash flows about double what the west side ones do, mostly because of tax rates. Same builder, same floor plan, very different bottom line.

    3. They're rent-ready at closing. Fridge, stove, washer and dryer, blinds and a garage door opener are all included. With the 1-2-10 builder warranty, maintenance is close to zero for the first couple of years - it has come in clutch for some clients (whereas clients that bought resale would have to cover that out of pocket which eats into our profits)

    4. Market it before you close. I start marketing 2–3 weeks before closing. On one of these, we had applicants screened before closing and it was rented before the first mortgage payment was due - that doest always happen, but that is the goal (and most times we hit it)

    5. Understand the ARM. After year 7 it adjusts so have a refi or exit plan.

    Is anyone else seeing new construction beat resale on cash flow right now? And if you're weighing builders or subdivisions in San Antonio, I'm happy to compare notes on which price bands, areas and incentives are working. Feel free to DM me.

    Interesting comparison, @Michael Gonzales ! I especially like that you separated your estimated monthly cash flow from vacancy and capital expenditure reserves.

    From an accounting perspective, I think it's also valuable to distinguish cash flow from operating profitability, particularly when mortgage payments include principal.

    As an investor adds more rental properties, tracking income, operating expenses, and cash flow separately for each property becomes even more useful.

    Thanks for sharing the numbers and your experience!

    1Reply
    • Michael GonzalesBusiness Member
      OP
      Real Estate Agent · San Antonio · Member since 2018 · 32 posts · 12 votes
      1h

      Thanks @Meron Bekele, that's a fair callout. On these new builds a real chunk of the PITI is principal pay down, so the monthly cash flow number and the actual profitability aren't the same thing, and neither one captures depreciation. I keep every property on its own books for exactly that reason, and it gets even more important once a client has 3 or 4 of these. I like to call each property a "money tree" because it takes effort to plant but once its up and going, it continues to grow and accumulate equity with debt pay down, so I like to track each property separately for my property management clients in their owner statements. Curious from the accounting side: what's the one report you wish more small landlords looked at every month?

      P.S. One more hidden bonus has been rent growth over time which has made for some really nice cashflow on my older properties (but you need to keep an eye on tax assessed value in Texas)

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