Investor’s Edge with Jim Sheils: Why Old Properties Could Cost You More Than You Think – The Case for New Construction

When it comes to real estate investing, many people are drawn to old fixer-upper properties, thinking they offer great value. However, through my experience, I’ve learned that new construction is the way to go. Let me share why.

 

 

At first, I was open to investing in older properties, but after transitioning to new construction, I quickly realized the advantages. Old properties come with deferred maintenance issues, unexpected repairs, and ongoing maintenance costs. These problems can drain your resources, time, and energy—factors that can make or break your real estate success, especially in the first few years.

 

 

Once I started investing in new construction, I noticed a significant difference. The headaches of constant repairs and maintenance almost disappeared. New homes are built to modern standards, reducing the risk of unexpected issues. This leads to lower maintenance costs and fewer surprises along the way.

 

 

One of the biggest advantages of new construction has been tenant retention. When we were dealing with old properties, our tenants would stay for an average of 13 months. However, with new construction, that number jumped to 3 years! Lower turnover means fewer vacancies, less time spent finding new tenants, and a more consistent cash flow.

 

 

In the early years of real estate investing, financial stability is crucial. You might not have a large reserve of funds to cover unexpected repairs and vacancies. With new construction, you minimize these risks, making your investment journey smoother and more profitable.

 

 

If you’re looking to build long-term wealth in real estate, my advice is simple: go for new construction. The lower maintenance, fewer surprises, and improved tenant retention make it the smarter choice. Avoid the pitfalls of old fixer-uppers and set yourself up for success with a property that works for you—not against you.