In many ways, the housing market has always reflected broader societal and economic trends. For instance, there’s been an undeniable shift from home merely being a roof over your head to becoming more of a lifestyle decision – a choice about the type of life you want to lead, the aspirations you have, and the comfort your residence can offer.
It’s against this backdrop that new homes have sprung up recently to take center stage. But are they a smart investment? Yes, they boast sleek designs, modern features, and excellent curb appeal, but are you better investing in a fixer-upper or investing in a brand-new, untouched home? The answer is a resounding “yes” to the former over the latter.
So, let’s look at why that’s the case and how new homes might just present the smartest real estate investment out there today.
Avoid the Headaches and Heartaches of Repairs and Renovations
Perhaps the best place to start is with the most obvious benefit. When you receive the keys to your brand-new home, you set foot inside without needing to touch anything. All there is to do is unpack your belongings and start living your life.
The same can’t be said for older homes. Old electrics, outdated plumbing, and hidden problems contained within the foundation slab may all serve to keep you up at night. And that’s the point. It’s not just the financial burden of putting these things right. It’s the emotional toll they can take. You can be happy in your home one minute, then deal with a burst pipe flooding your home the next.
Of course, that’s not to say that all older homes have these issues. But they are far more likely to crop up, and you’re on the hook for them. With problems such as slab leaks costing an average of $3,100 to fix, that’s a significant chunk of extra change you will have to find.
By contrast, in the unlikely event you suffer a similar fate with a new home, you’re covered by warranties and guarantees.
New Homes Offer Greater Longevity
The other significant advantage these homes hold over older homes from existing housing stock is that they take advantage of the latest advances in materials and construction techniques to better stand the test of time.
Modern insulation, higher-quality roofing, and even the entire design of homes have changed considerably in just the last decade. Building codes and standards are not set in stone. They are iterated every year (as they should be). For you as a buyer, that means you benefit from each and every improvement and enjoy a home built to the latest standards.
You won’t have to think about replacing major systems or structural elements for at least over a decade, or maybe even at all, if you plan to move again in the longer term. Compare that with a home built in the early 2000s, when building codes weren’t as stringent, and materials weren’t the same quality.
The best-case scenario will see you paying higher running costs and the occasional repair here and there. In the worst-case scenario, you’ll have to budget for significant remedial work.
New Homes Often Come with Numerous Financial Incentives
When buying a standard property, there are minimal financial incentives thrown your way. In fact, the only way to secure perks is by negotiating with the seller on aspects such as the sale price and fixtures and fittings.
By contrast, new homes have all kinds of incentives to help sweeten the deal. For example, when you look at new home building companies such as LGI Homes, they offer all kinds of incentives – from interest rate buydowns on mortgages to builder-paid closing costs.
They even, as part of their signature CompleteHome™ package, equip their houses with everything you could need, including top-tier Whirlpool® appliances. Those additions alone are worth thousands and save you from having to shop, finance, and install these crucial home features.
However, there are even more financial incentives to be found if you scratch beneath the surface. Look at running costs, for example. With energy-efficient lighting, appliances, and Low-E windows, your utility bills may well be a fraction of the cost of an old and drafty home. Likewise, homeowners insurance premiums will be lower with better safety features and fewer risks.
In short, not only do you save on costs upfront, but you also save money down the road.
New Homes Retain Resale Value
The appeal of buying an older home with work to do is that, once complete, those investments in renovations and decorations should make a healthy return. That is undoubtedly true in many cases, but that’s not to say that new homes also can’t offer solid resale value potential.
Firstly, all their modern designs and features will appeal to future buyers and deliver a competitive edge in any resale market.
But their surrounding communities also play a role. New homes are often built in master-planned communities, complete with community-only amenities such as swimming pools, parks, hiking and biking trails, fitness centers, and children’s play areas. Pair that with proximity to good schools and infrastructure like highways to major employment centers, and you’ve got a recipe for a desirable home come resale time.
Lastly, these new home communities are often deliberately constructed in up-and-coming suburban areas that offer a much higher ceiling for growth than already established locations.
So yes, you can opt to invest in an older home, make improvements, and reap the rewards. But you can enjoy similar returns without investing anywhere near as much time and money by buying new ones.
New Homes: The Intelligent Play for Homeowners Looking for Good Investments
Buying any home is a huge financial decision. So it’s only right that you want to get it right. But contrary to popular advice, buying brand new real estate might be the best way to not only protect your investment but enjoy the highest standard of living, too.
From securing homes in move-in-ready condition to enjoying a whole host of financial incentives both before and after signing on the dotted line, there are very few valid reasons not to consider buying a new construction home.
So, if you’re on the hunt for your next (or first) property, remember to bear these factors in mind rather than limiting yourself to existing housing stock within your chosen area.