As you evaluate your rental property portfolio, you might be considering a growth strategy in the new year. The market in San Ramon, CA, is strong, and you may even have your eye on a few properties to buy. But before you make the investment, you might also be wondering if it’s better to own an older, existing property or new construction. There are benefits to both, especially in San Ramon. And while one may not be technically better to own than the other, there are a few pros and cons to consider.
Benefits of New Construction
It used to be that new construction homes were far more expensive to buy than older homes. But these days, with the increased availability of building materials and smaller new home lots, new construction properties in San Ramon can be quite affordable. Newly built homes also tend to be more energy-efficient than some of the aging properties, with better insulation, new windows, and fresh materials throughout construction. The new construction home also usually features or is ready to outfit, with the latest technology and design layouts. As a rental property owner, you’ll have less maintenance to worry about upfront, and you’ll more than likely have a quicker timeline to make your property rent-ready.
Potential Setbacks with New Construction
As a rental property owner, you’ll recognize that new construction usually costs more than resale value, meaning building up equity will take some time. These homes can sometimes follow a similar architecture to others in the area, and even cookie-cutter-like. This lack of uniqueness could be a setback if the floorplans are similar throughout an area. Landscaping may be professionally designed, but you’ll likely have immature vegetation, which might also be a design setback. Newly developed neighborhoods can sometimes be ideal for nearby commercial property development, as well. You might not be so thrilled with your location if a fast-food restaurant pops up next door.
Benefits of Older, Existing Rental Properties
They don’t build properties like they used to, and older homes have stood the test of time due to the genuine craftsmanship that went into initial construction. Older homes in San Ramon can sometimes offer larger yards and mature trees for the added outdoor character. The properties themselves tend to be unique, and it’s those classic crown moldings or sprawling archways that can be attractive to new renters. The older homes also tend to be located within established, residential neighborhoods.
Potential Setbacks with Older Properties
Obviously, older homes in San Ramon may require updates and replacements to make them rent-ready. These endeavors could be more costly if an electrical system or plumbing system needs to be completely redone. And there may be even more maintenance required, in general, as older homes reach their wear and tear thresholds faster than new construction properties. A roof might need replacing within the first year or two of ownership, for example. It’s also possible that existing properties can be less energy efficient, with failing window seals and aged insulation.
New construction investments will usually mean less work upfront but longer timelines to see vested returns and equity. Older homes can be costly on the maintenance side, especially in the beginning. But they can also be ideal investment properties in San Ramon with a quicker ROI. If you’re still deciding for yourself and aren’t sure which option is the better investment for your portfolio, contact PMI CONTRA COSTA. We can help you sort through all the pros and cons as they relate to your investment strategy. And having a rental property management partner in San Ramon can help preserve those property investments for the long term.
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