Buying vs. Building
As an investor, should I build or should I buy something already built? This is a great question and one I have been asked frequently over the years! As we move through the current season of real estate, buyers I speak with continue to ask me whether building a new cabin makes more sense than buying an existing one. If you are an investor wondering about this topic, the answer is dependent on what your goals are for your real estate investment. There are advantages to both. Let’s investigate further.
Five Reasons to Buy Something Already Built
- You know exactly what you are getting! You can walk it, touch it and inspect it now. If it is on a rental program, you can review the current rental history to see how it is performing and whether there is potential for increasing that gross income. While there can still be surprises when purchasing a property, buying something existing will significantly cut the odds of negative discoveries, especially if you had the home inspection done prior to the purchase.
- You can get it up and renting quickly. In many cases, if the cabin is on an established program, you can stay with that program and begin earning rental income right away from the bookings already on the schedule. The money begins to flow towards you.
- You know what your financing is going to be. Unlike building, there won’t be changes in cost due to unforeseen challenges during the construction process.
- You know the value of it now. Using a market analysis, and the appraiser assigned value if there is one, you will have a comparable guideline to help you determine the correct price for the property.
Five Reasons to Build your Investment Chalet, Lodge, Cabin
- You can build exactly what you want! In most cases, if you are building a custom cabin, you can design it the way you want it to set on the lot you chose. Even if you are purchasing a preconstruction design with a builder and developer in a particular subdivision/resort, you will usually have some say in the floor plan options and interior design choices.
- You can customize it economically without expensive removing of walls. The cabin will also have value added with the latest designs, amenities, etc. Compared to buying something existing where you might have to upgrade the interior at additional cost, the interior of your new cabin will already be designed with the latest trends in mind.
- You will have new appliances, new HVAC, new doors, new windows, the latest in insulation, energy efficient components. So maintenance is lighter for a good number of years as compared to an older property.
- You often can get a better price on new construction because builders recognize that you have to wait a year to occupy and start renting it out. If you choose correctly what you are building your new construction is much more valuable at the end of construction and can even be flipped for a profit.
- The latest new lodge, chalet, cabin is often more attractive to renters.
So, with these points in mind, you are ready to make your selection in your next cabin! If you have other questions, my team and I are always available to help.
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