Much of the talk of real estate investing in today’s climate focuses on existing properties. Real estate values that are depressed due to the condition of the property or the financial situation of the owner. Buying and selling existing real estate is a proven method investors use to acquire wealth andnew contstructionincrease monthly cash flow.

And with the foreclosure wave that spread across the country that appears to be subsiding, finding homes priced below market has captured the attention of the experienced investor and layperson alike. But there are other opportunities that don’t involve existing homes that real estate investors can profit from—new construction.

Depending upon the location, there are areas where it makes better financial sense to build a new home for sale or rent compared to buying an existing property. Where are these places? Finding opportunities in new construction are located in areas where there is a current shortage of inventory. A seller’s market if you will where the supply of homes for sale can’t keep up with the demand. Not exactly a housing bubble mind you but the result of a latent construction economy that may be just now awakening.

Certain real estate markets are doing quite well. Very well in fact and with rates still near historic lows well qualified buyers can find themselves competing with other investors for the same real estate. When there is a shortage of existing homes, new construction fills the void, keeping prices in check and helping to balance the inventory while providing tidy profits to real estate investors who see the opportunities provided for new home construction.

Comparing an existing property to flip with a newly built home at its base is determining if the property can be sold for a profit, above all expenses and new construction is no different. Finding these building trends takes some research so it’s not something to dive into without feeling confident about the housing market, demographics and economic forecasts. Yet new construction for real estate investors is an area that’s much less crowded with competitors. There is a class of buyers who want nothing except a brand new house. Successful real estate investors recognize this class and anticipate shifting housing trends.