New construction properties are a great real estate avenue to invest in. it is one of the major areas where you can expect high ROI in a short amount of time. However, with everything in the world, you need all the information and the research to make your investment pay dividends. Not only do you need to have a clear idea about the location and the property features to earn the dividends, but you will also need to forge connections to build your portfolio.
According to the expert real estate agents at MyFriendFernando.ca, knowledge, and education are the critical ingredients for making a-killing in new property investments. You need to find the time to research, and you need the money to start the process of home buying. So, here are some expert tips to make it big in the real estate world without further ado.
Work with a lender – mortgage issues
When it comes to making a home purchase, you need to shop for a lender. To choose the right mortgage, you need the right lender. However, the trick is to find the right one among the thousands on the market. Shop for the right lender early on because saving even a fraction or two percentage points might mean saving thousands of dollars in investment terms. Shop around for the right lender – ask at least 5-service providers to get the rates and options. Make an informed choice.
About the agent’s commission
The builder will pay the agent to represent you. Your agent will negotiate the best deal for you. Yes, it is that simple, and it works that way. So, every real estate investor should get a professional real estate agent to represent their best interests. Work with an agent who is an expert in negotiating with builders. Make sure you are transparent in your dealings. Develop a property hunting and purchase plan with your agent to build a portfolio successfully.
When it comes to new construction properties, you need to understand that you are investing in something that has not been built yet. All you have are pictures of what the property is supposed to look like after completion. So, how to make sure you invest right?
Research, the builder
When you are buying a new construction home, it is vital to research the builder. If your builder can keep up with the consumer demands and the modern building plans and amenities, you are on the right track. Finding the right agent will go a long way into finding you the right builders to target. However, you can do your research – look through the online reviews, user testimonials, and any news you can find on the internet. You can connect with residents or look at the builder’s previous construction projects to have a better idea.
Builders usually do not cut on the price even if your agent is an expert at cutting deals. That is where you need to get creative with your negotiations. Keep in mind you are looking for the best deal possible. And, it doesn’t always mean buying at the lowest price possible. Keep in mind that the value addition of a property comes through upgrades. So, ask for upgrades and turn your negotiation along those lines.
Get everything in writing
A respectable builder will usually honor what they say, but these are the smart world and, therefore, do the right thing. Get all the quotes, expenses, details of the deals, and upgrades in writing. It is all the more critical if you are negotiating your way into the agreement. Keep in mind you can avoid a lot of unwelcome surprises because you kept document proof.
Look for guarantee
New construction homes are brand new and shouldn’t have any leaky taps, roofs, or electrical issues. However, that doesn’t mean the builder won’t provide warranty cover, partially or wholly. Keep in mind the new construction property warranty and ask your questions to the builder before signing on the dotted line.
Do you need an inspection?
Yes, you need an inspection. Keep in mind that human errors are possible, and the builder might have missed installing a fixture or forgotten a specific area. A home inspection is essential because it ensures that you won’t be having any problems in the near future. Always go for a professional home inspection to review the work done in your home.
How much can you negotiate?
As stated in the earlier section, you can always try negotiating. But it is always better to arrange for upgrades rather than the price point. You can even negotiate the closing cost, the deadline, and other aspects. Builders usually keep the final price high simply because of the future appraisals, which you can use to your advantage in the coming years. Keep this factor in mind when looking to negotiate on new construction properties. Go for upgrades instead and increase the overall value of your property for future resale.
How good is new construction investment?
Simply put, it is excellent! New construction investment ranks better than resale homes due to the age and the availability of modern amenities. New construction homes sell faster, and if you are looking to rent the building, it will generate interest better. Tenants will occupy the premises quicker than any other form of accommodation.
So, any general cost estimate to start?
Yes, we can provide a rough figure for you if you are located and operational within the U.S. and Canada territories. The builders’ deposit is generally around 3% of the total selling price, and builders can often go as low as $3000 if you are looking for a hard number. Feel free to ask and negotiate with your builder for the deposit.
We understand that buying a home is a complicated task, and there are pitfalls in every investment strategy. That is where planning comes into play. New construction homes are easy to find, buy and sell. Work with the right agent, research the builders for info, in and around the locations you have as targets and build the best real estate investment portfolio in the market. All the best!