Lately, new construction is starting to grow again, and this is causing some investors to consider making a shift. Rather than working and focusing on rehab homes, a few are opting to break into the building and development industries. But is this the right call?
Even though buyers are certainly drawn to new construction developments, this doesn’t necessarily mean these properties are wise choices for real estate investors. In today’s market, these new homes are priced at the top of the market and are often the ones waiting longest to be sold.
Furthermore, the reality of becoming a builder is just not as profitable as many are driven to believe. Compared with flipping, developing homes brings far less in returns, and comes with the added risk, longer turnaround time, and more headaches and decisions the whole way through.
Be sure to weigh all the factors before switching into building new construction. Creating a develop is exciting, but making smart and safe investment choices leads to better returns.