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 · 34 posts · 13 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 · 14 posts · 6 votes
4d
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!

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  • Meron Bekele
    Accountant · Las Vegas · Member since 2026 · 14 posts · 6 votes
    4d
    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 · 34 posts · 13 votes
      3d

      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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    • Meron Bekele
      Accountant · Las Vegas · Member since 2026 · 14 posts · 6 votes
      3d
      Quote from @Michael Gonzales:

      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)

      Thanks, @Michael Gonzales ! If I had to choose just one, it would be a property-level Profit & Loss statement, ideally compared with the budget or expected expenses.

      I think small landlords benefit from reviewing not just how much rent they collected, but also how much they spent on repairs, maintenance, insurance, property taxes, and other operating costs.

      The comparison helps identify unusual expenses, changes in operating margins, and which properties may need closer attention.

      Of course, the P&L doesn't tell the entire story. I would still review cash flow and balance sheet activity separately, especially mortgage principal and capital improvements.

      I also like your approach of keeping separate records for each property. It makes those monthly comparisons much more meaningful.

      0Reply
  • Aaron ZimmermanBusiness Member
    Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
    2d

    Michael - how do you feel about your interest rate risk and needing to refi out?

    Good way to get creative in today’s market

    [email protected]
    Brick House CPAs53 Reviews
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  • Chris ColtonPro Member
    Investor · San Antonio, TX · Member since 2026 · 31 posts · 18 votes
    2d

    Good post, Michael. The tax point is the one I see trip people up here in San Antonio. Two homes can look the same on rent and price and land in very different places once the tax bill shows up. Most of what I look at is resale, so this is a helpful look at the new build side. Curious which side of town you are liking most right now.

    210-756-9075
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  • Divin KanyamaBusiness Member
    Accountant · Seattle, WA · Member since 2025 · 612 posts · 254 votes
    2d

    @Michael Gonzales Thanks for sharing the real numbers. The point about price band and taxes matching the floor plan is the one I'd underline, since the same house can behave very differently depending on the tax rate. Your note on the builder warranty is a good one too. Near-zero maintenance in the early years is a real advantage over resale, and it's easy to overlook when comparing deals.

    I'd add two things for anyone copying this strategy. Stress-test the cash flow after vacancy and capex reserves, since an average of $500 a month before those can shrink quickly. And with the ARM, have the refi or exit plan written down at purchase, so year seven doesn't arrive as a surprise. Builder incentives also change often, so rates and terms may look different by the time someone reads this.

    [email protected]
    WEMBO CPA532 Reviews
    WebsiteView Page
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