What to build, oh what to build? With rental rates still on the rise, home values appreciating and mortgage loans still rather difficult to navigate, especially for first timers, real estate investors are turning to new construction for rental properties compared to buying a fixer-upper as a flip or a long term hold.what to build But the investor does have a few choices to make regarding what to do with the property but before anything gets too far out of the gate it needs to be determined what, exactly, will make the best rental property?

That’s a very solid question and one that should claim considerable time before turning that first pile of dirt. Once construction starts, it’s very hard, impossible in some cases, to make significant changes without incurring hard-to-swallow costs. But if you’re going to build a single family or multi-family home to hold and rent, you want to appeal to as many potential renters as possible. That way, you’re almost guaranteed a constant cash flow.

If you’ve determined a particular area where you’d like to plant your future rental, research will tell you what the market rents are and from there you can deduct basic demographics of the area such as income and the major employers. If market rents are consistently strong and vacancy rates are near zero, you’ve found your spot and all you need to do is build what’s around. If the area is stacked with single family residences that’s your target. If on the other hand if there are duplexes and 2-4 unit properties that warrants further exploration.

The key in many instances is to provide what the market has already determined there is a demand for. Don’t put in a geodesic dome just because you think you can get more rent if it will be the only one in the area. It’s not time to push the envelope but respond to existing demand. Only your unit will be the newest one on the block.