A new-build rental can be low-maintenance, attractive to tenants, and positioned for long-term growth. But buying smart takes planning if you’re thinking of buying an investment property to rent.
Why it matters
Rental demand is strong: One-third of Americans are living in rental housing with 44 million renter-occupied housing units. The median rent is approximately $1,700. Industry trends also suggest that new builds – or build-to-rent are a growing market for investors and an appealing option for tenants.
The keys to help you find the right new construction home for rental
1. Location matters most
Proximity to jobs, universities, or desirable neighborhoods drives demand.
Research vacancy rates, rent trends, and crime stats before committing.
It is not necessary for a landlord to live in the area.
Major cities often top the list for yielding the highest monthly rents including San Jose, San Diego, San Francisco, Los Angeles, Seattle, Boston, and New York City.
Average Rental Income for some major cities:
| High Rent Locations | Median Rent | Low Rent Locations | Median Rent |
|---|---|---|---|
| Salinas, CA | $3,343 | Youngstown-Warren, OH | $935 |
| Barnstable Town, MA | $2,512 | Fort Smith, AR-OK | $1,004 |
| Boise City, ID | $2,208 | Wichita, KS | $1,095 |
2. Budget for investment lending
Expect to put 15–20% down. Unlike primary residences, investment loans don’t allow low down payments or private mortgage insurance.
3. Safety sells
Renters want secure neighborhoods.
Check crime data, visit the area at different times.
Assess traffic, lighting, and noise.
4. Amenities attract
Schools, parks, coffee shops, gyms, and transit access make properties more rentable and valuable long term.
A sense of community and excellent amenities are another perk.
Easy access to day-to-day needs will set you up for short- and long-term success
5. Curb appeal counts
Parking, outdoor space, and attractive finishes help a listing stand out. These small perks can justify higher rent.
Inform tenants of parking situations including street parking and parking garages, if a designated parking spot is not available.
Private backyards or balconies give renters a space to unwind and possibly more money in your pocket.
6. Upgrades pay off
New builds already mean fewer repairs.
Add appeal with modern appliances, durable flooring, and must-haves including in-unit laundry and dishwasher.
Consider the return on investment of features like heated bathroom floors in the bathroom or flex space for a home office or play area.
7. Growth potential fuels returns
Look for up-and-coming neighborhoods tied new infrastructure.
Watch for tech giants establishing a headquarters – prime opportunity to invest in rental property with a workforce sure to follow.
Rising demand boosts rental income and resale value.
8. Factor in extra costs
HOA fees, property taxes, insurance, and maintenance all cut into profits.
High fees may still be worth it if the area commands premium rents.
Be sure to know the common investment property mistakes.
Bottom line
A new-build rental can offer reliable tenants, fewer repairs, and long-term value. The key is buying in the right location, with the right upgrades, and budgeting realistically for ongoing costs.
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Carmen Chai
Carmen Chai is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. For NewHomeSource, Carmen covers a variety of topics, including insurance, mortgages, and more.