I often have customers that have either been investing in real estate long term, or those that are purchasing their first investment property initially come to me in search of resale inventory in the South Florida marketplace. Although there are great opportunities and options in the resale marketplace, I find it curious that many of these same customers have not considered new construction when it’s in the same price point they are looking in. To be clear, we are talking apples to apples here as well, meaning I am not comparing single family homes in the resale inventory to town homes or condominiums in the same price point / areas. In certain price points and markets in South Florida there are new construction opportunities priced similarly to resale properties of the same category.
New is appealing from a real estate investment perspective because it affords the purchaser many considerations that makes the investment less imposing over time when compared to a property that is a few or several years older.
Builder warranties are one of the many advantages to purchasing to be built or spec inventory real estate from developers. Most South Florida new construction properties will come with a 10 year structural warranty from the builder as well as a one year “bumper to bumper” warranty on all other components such as electrical, plumbing, appliances, interior appointments, and so on. What’s there not to like with a 10 year warranty on the roof from the date of possession of the property you are purchasing? What’s there not to like about there being much less of a likelihood of your tenants reaching out to you because the microwave or refrigerator stopped working? Even if those annoyances were to happen with new construction, it would be covered by the developer’s warranties and you wouldn’t be out of pocket for those expenses if it was not due to tenant negligence. With real estate as an investment vehicle, you have to factor in these costs that do come up throughout the length of your retention of the asset. Things break, stop working, and the costs are typically passed on to the owner / landlord. There are less of these incidentals when the property is new / newer and under warranty.
New oftentimes offers the latest and greatest in building code implementations in construction. Whether you’re a landlord that lives five miles or 5,000 miles away from your South Florida rental properties, life is so much easier when hurricane season starts if your property has hurricane impact windows and doors as opposed to no protection or old school metal panels that require tedious installation by either yourself, someone you’ve paid to put them up and take them down for you, or your disgruntled tenant that has to take an entire day off of work to secure the property and may or may not do the job properly. A new roof built to the latest code standards will give you discounts on your homeowner insurance premium and thus net you a higher return on your investment. A more efficient air conditioner will require less maintenance than an older one and make for happier tenants when the monthly utility bill comes in.
Builders are known to provide incentives for their buyers that can be applied toward closing costs and upgrades in their product offerings. This actually turns out to mean lower cash to close on a real estate transaction sometimes than on the resale side, which in turns raises your return on investment. Get in at the right time: end of the last quarter of the fiscal year, or at the very beginning of the sales cycle of the development, and on the flip side at the very end of the build out is oftentimes advantageous as well.
New oftentimes equates to less time on the market offered for rent, and a higher premium on the lease amount when compared to similar properties that are aged. Renters like new because it translates to less potential headaches for them and gives them more of a feeling of the property being theirs to use, as newer properties are less likely to showcase that wear and tear from years of other tenants’ use.
Carrying costs such as association dues and property insurance are oftentimes lower when comparing similar properties in the area that have already been around for a few years. For example, a community that is 15 to 20 years old is more likely to have special assessments or have association dues raised to address the standard issues that need to be addressed as communities age: painting and pressure washing buildings; fixing community pools; dealing with establishing reserves for upcoming roof replacements / repairs; updating community common areas; and the list goes on and on.
I can keep going on with the advantages to purchasing new construction on the investment side of real estate. I hope this blog post gets your attention enough for you to call or email me instead so that we can discuss it in further detail.
Recent New Construction Sales
From 1031 exchanges (yes I am familiar with the process, call me up) to end users I have had the privilege of working with a diverse group of customers so far this year to contract on some new construction properties.
West Broward has a variety of communities that are quite interesting / promising for investment purposes within the $300,000 to $400,000 price point range. The developments I am referring to are multi-family master planned communities that grant title to purchasers in lot and block, fee simple ownership. This is a plus in South Florida as there are many properties that offer condominium ownership instead and are a bit more restrictive in terms of financing. It’s easier to sell your investment in the future when it’s deeded lot and block, as opposed to condo in this price point because your most likely purchaser will be an end user and they will likely be utilizing VA, FHA, or low down payment conventional financing. But I digress…
These are some of the communities / developments wherein I’ve recently taken purchasers to contract that I estimate to be solid, long term strategy investment opportunities:
Here are some listings I recently marketed, negotiated and sold / leased. Yes – I absolutely always use professional photography for all of my listings.
1799 NW 124th Way, Pembroke Pines, FL 33028.
1502 SW 147 Terrace, Pembroke Pines, FL 33027
A Little Something About Me
Oscar Rodriguez with Esslinger Wooten Maxwell Realty International – that’s me. I’ve been in the general real estate residential sales market as a licensed professional for over three years now and I have achieved a pretty good track record in terms of sales production and customer satisfaction. I know what I’m doing and I always put my customers first.
You can check out my profile on LinkedIn.
My track record in terms of sales is easily accessed on my Zillow profile.
I have vast experience in a variety of facets of the real estate industry, having worked for a Fortune 500 national builder for 5 years prior to transitioning into the general real estate component for the past three years. Before working for the builder I was a mortgage loan officer that worked my way into management as VP of Sales for a local direct Fannie Mae lender in Coconut Grove, Hayhurst Mortgage Inc., for a total of eight years. I understand the financing intricacies of residential real estate better than most real estate agents. I understand the new construction processes and ins and outs better than most real estate agents. In the past three years my production has earned me a place within EWM’s top producing agents (look up the brokerage’s production – no small feat) for all three years and my customer portfolio keeps growing because I keep performing for everyone that takes me on as their real estate consultant. It is my wish that you are the next one to take me on as your trusted real estate adviser.
Thanks for the read.