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ew construction development is transforming the real estate landscape by offering savvy investors an opportunity to revitalize underutilized urban spaces into thriving communities with promising returns on investment.
Dan Magder and Greg Shron's company, Center Creek Homes, has been at the forefront of this movement in Richmond, VA, creating affordable, high-quality housing for families through a unique approach that combines creativity and collaboration. As cities face housing stock shortages, infill construction provides an alternative solution by filling gaps in existing urban communities rather than expanding into new suburbs.
For real estate investors considering new construction projects, the question of whether to build-to-rent or build-to-sell is crucial. Each option has its pros and cons, with the right choice depending on individual investment goals.
Infill and new construction involve maximizing available space in urban areas by giving a facelift to empty lots or run-down properties. This type of development increases urban density, utilizes existing infrastructure, and can revitalize neighborhoods. New construction financing enables investors to acquire and build their next property without tying up all their own capital.
When deciding between building-to-rent and building-to-sell, investors must consider the neighborhood's characteristics and market conditions. Building-to-rent may be more lucrative in areas with desirable amenities and strong rental demand, while building-to-sell might be better suited for neighborhoods where homeownership is preferred.
Building-to-rent offers long-term income potential, consistent cash flow, and an inflation hedge, but comes with high upfront costs, management responsibilities, and market fluctuations. On the other hand, building-to-sell provides quick capital recycling, high cash-on-cash returns, and no property management stress, but exposes investors to market conditions and may require higher construction costs.
Ultimately, the decision between building-to-rent and building-to-sell depends on individual investment strategies, market conditions, and neighborhood dynamics. New construction offers exciting opportunities for investors and developers looking to maximize their investments.
