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Updated 2 days ago on . Most recent reply
BRRRR vs. New Construction
I'm looking to invest in my first long term rental property and am struggling deciding which route to take. My husband and I are fairly handy but I'm worried about biting off more than we can chew. We have a lot of new construction/ cookie cutter homes going up for the same price point as any BRRRR I would buy. So Im starting to feel that buying something that is turnkey would be the better option for us. I do know that the quality of work in these homes isn't the best, but just looking at what's best for getting started.
Open to hearing any and all opinions!
Most Popular Reply
I would be an advocate for the other strategy, New Construction.
I many areas the price of new construction is falling. I work is some areas that the price of new construction is now under existing homes. This is the first time in a very long time this has happened. This also takes into account the great incentives that you can find from builders. I have seen some incentives like Free Property management and Rate buydowns. I have worked with builders that have offered Rates as low as 3.75%. This type of incentive can make an investment work.
When i talk with investors that are still looking for BRRRR, the problems they have is after renovation and renting, they can't make the numbers work for the refinance. If they get long term financing at today's rates the property no longer cash flows.
The last point I would consider is appreciation. I think most investors would agree that a New house will appreciate with the comparables of new construction. This will normally move quicker that a home built 20,40 or 60 years ago.
Connect with me if you have more questions.
Best of Luck.
- Todd Anderson
- [email protected]
- 651-492-5652
