We’ve noticed a trend, over the past few years. An increasing number of property investors are choosing to build new homes, rather than purchasing existing housing stock. Why? Because a new home commands a higher rent, attracts careful tenants, meets the new Healthy Homes standards, is less likely to need repairs and is easier to maintain.
As New Zealand’s most trusted home builder, we are building more properties for the rental market than ever before. If you’re thinking of starting your investment property journey, here’s a summary of why building new is a smart strategy.
If you can afford an existing property, it’s likely you can afford to build a new property. Contrary to common assumptions, new builds can be cost-competitive. They’re often located on the outskirts of older residential zones, where land costs are lower. In other cases, new builds happen within older residential areas where land has been subdivided or redeveloped - you get a smaller section, but all the benefits of a brand new home.
Always keep in mind that you’re looking at long-term capital gain, as well as rental yield. One day you’ll want the property to deliver a good return. We know that a recently-built home, which is fully permitted and constructed to modern standards, will usually achieve more buyer interest and a higher resale price than an existing home.
A new-build means you get the attractive street front and modern floorplan that tenants want. Depending on your budget, you can build a property with stand-out features - like a master suite, multiple bathrooms, a kitchen with a scullery, an extra lounge, a double garage and a north-facing outdoor entertainment area. Energy efficiency is also a benefit tenants look for, because double glazing, heat pumps and high levels of insulation help to keep their electricity costs down.
When you buy an existing home that’s shabby or doesn’t quite work for a modern lifestyle, you might need to do major renovations before you can maximise rental yield.
A new-build is often cheaper to insure than an older home, especially a home built before 1935. Insurance companies recognise the lower risks of a new home with lower premiums, which is a win for your peace of mind and your wallet.
Modern building materials generally mean less maintenance, so your expenses will be reduced. With guarantees on materials and workmanship, you won’t have to worry about the costs of unexpected issues.
If you’re ready to start (or add to) your investment property portfolio, it’s time to talk to a respected builder. Year after year, we have won the Reader’s Digest Trusted Brand Award for home builders. Our team's goal is to deliver homes that are well-designed and carefully constructed. At the same time, offer a customer experience that’s reassuring, transparent and stress free.