Real estate investing remains one of the best and most stable ways to improve your profitability and your net worth, and this is particularly true if you can get in on the new construction boom that is happening across many US cities. Whether you’re interested in residential or multifamily properties, these are the five cities to consider.
#1 – San Antonio, Texas
Though San Antonio is rather large compared to other US cities, it is often overlooked for other Texas metro areas like Dallas or even Austin. Single-family home prices in the San Antonio area have climbed about 9% in the last year, and the demand for new builds continues to grow – even when it comes to new builds valued at less than $200,000. Prices in San Antonio are low, and the economy is strong, so if you are looking for a place to build investment homes, this is by far one of the best.
#2 – Springfield, Missouri
Missouri may not be the most exciting state in the nation, but it is one of the most profitable for anyone considering new build real estate investing, and that’s especially true if you plan to rent the property. The average cost of a home in Springfield is only slightly more than $154,000, but experts think that these homes are severely undervalued. For this reason, a new build-turned-rental can yield serious profits in the right part of the city – and at the right price point. With an expected population increase of about 2.5% in the next few years and a 5% increase in the job market, it’s easy to see why Springfield is a favorite.
#3 – Minneapolis, Minnesota
Minneapolis is another great choice for several of the same reasons. Per PwC’s annual Emerging Trends in Real Estate Report, it was the number one city in the nation for investing in multifamily properties in 2019, and that includes new builds. It remains a seller’s market, though, with the average amount of time a home spends on the market hovering at 43 days last year. Though it may be difficult to buy a home for a fix-and-flip, building a home is a phenomenal alternative. This is especially true when you consider that experts forecast a steady 1% to 1.5% population growth each year for the foreseeable future.
#4 – Orlando, Florida
In Orlando, the average home price is right at $250,000, which makes it a little less profitable right from the start. However, predictions that Orlando home prices will skyrocket by 35% in the next few years make it a great place to consider new build homes. Over the next couple of years, jobs will increase by about 7% while the population grows by a whopping 8%, and this will drive the demand for new homes in some of the city’s hottest neighborhoods.
#5 – Tucson, Arizona
It’s a seller’s market in Tucson, as well, which is fantastic news for new construction investors. The demand is far greater than the supply here, which offers up plenty of opportunity – even in the luxury homes market. In the last few years, Tucson’s economy has experienced significant growth after attracting plenty of new business. Both young people and retirees love the atmosphere, so if you’re looking for a great place for a pre-sale build, this is it.
Though the best cities in the US for turning a profit on new construction real estate investments may come as a surprise, the truth is that cost in more populated cities like San Francisco and New York make it prohibitive to profiting on new builds. Look for areas where supply simply cannot keep up with demand, and then familiarize yourself with the demographics, potential for growth, and economy to pick the perfect city for your next investment.