Why New Construction Might Be the Smartest Play in Real Estate Right Now

Why New Construction Works for Investors

That’s why new construction has started to look so appealing. When you buy a new home, you’re not inheriting decades of wear and tear. You’re starting fresh.

The first advantage is predictability. Most builders include warranties on major systems, structure, and appliances. For the first five years, your most significant expense might be landscaping and cleaning. That steadiness ensures reliable cash flow, a quality that old homes rarely possess.

Then there’s the tenant side. Renters want modern layouts, open kitchens, energy-efficient systems, and even smart home features. A recent Rently survey found that 65% of renters are willing to pay more each month for smart home features, such as smart locks and security cameras. 

This is just one of many data points showing that modern, tech-enabled homes command a premium. Higher gross rents plus less turnover? That’s a winning combo.

Running the Numbers

Imagine two scenarios.

Investor A buys a $250,000 home built in the 1980s. The rent is $1,800 a month. After taxes, insurance, and maintenance, they net about $1,100 before debt service. Not bad.

But in year two, the roof fails, costing $20,000. In year four, the HVAC dies, another $5,000. Over five years, that “great deal” doesn’t look so great.

Investor B buys a brand-new, $300,000 home. The rent is $2,000 a month. Taxes and insurance are slightly higher, but maintenance is nearly nonexistent. Their net is closer to $1,400 before debt service. 

Over the past five years, there have been no surprise CapEx hits. The return stays steady, and tenants are happy to renew.

Even though Investor B paid more upfront, they came out ahead because their cash flow wasn’t eaten alive by repairs and turnover.

Why Now Is the Moment

This isn’t just theory. The U.S. was approximately 4.7 million housing units short as of 2023, according to Zillow. Demand for rentals is through the roof, and tenants are competing for quality housing. Builders like Lennar are responding by delivering investor-ready homes designed for today’s renters.

We’re also in a unique environment where builders are motivated to work with investors. Mortgage rates have cooled a bit, resale inventory is still tight, and builders want to move their pipeline. That opens the door for opportunities that didn’t exist a few years ago.

And let’s not forget demographics. Millennials and Gen Z now make up the bulk of the rental market, and their preferences lean heavily toward modern amenities and energy efficiency. It’s no wonder demand for new construction continues to climb.

Enter the Solution

Here’s where Lennar has made things simple. Lennar’s Investor Marketplace delivers curated, turnkey new homes across 90+ markets, complete with trusted rental comps, built-in warranties, and end-to-end support, with financing, title, and insurance. 

Whether you’re buying one property or building a nationwide portfolio, the process is streamlined and designed for investors. Think of it as the difference between piecing together random deals on the MLS versus using a marketplace built for scale.

Let’s say you’re a busy professional who wants to invest in rentals, but doesn’t have time to manage renovations. With Lennar’s Investor Marketplace, you could pick up two new homes in a fast-growing market like Dallas. Rent them out, enjoy predictable performance, and grow your portfolio without the headaches.

Compare that to chasing older homes, fighting with contractors, and juggling higher turnover rates. One path feels like a full-time job. The other feels like investing.

Final Thoughts

Old homes will always have a place in real estate investing. Some investors enjoy the challenge of rehabbing and the potential upside that comes with it. But if your goals are steady returns, predictable performance, and scalable growth, new construction is worth a closer look.

With Lennar’s Investor Marketplace, you can access investor-ready homes nationwide, backed by warranties, data-driven insights, and end-to-end support. It’s never been easier to build a portfolio with confidence.

Disclaimer:

Statements made are based on currently available information, current market conditions and should never be relied upon. Market rates are based on market trends and other factors that can cause predictive statements to differ materially. This statement is no guarantee of the present or future market conditions and market values. Lennar makes no guarantee of present or future market conditions. Forecasts, projections and other predictive statements should never be relied upon. You should consult your own accounting, legal and tax advisors to evaluate the risks, consequences and suitability of any real estate transaction. All product and/or company names are trademarks TM or registered trademarks ® of their respective owners, and use of these marks does not imply any sponsorship, endorsement, support, or affiliation between the trademark owners and Lennar. This is not an offer in states where prior registration is required. Void where prohibited by law. Copyright © 2025 Lennar Corporation. Lennar and the Lennar logo are U.S. registered service marks or service marks of Lennar Corporation and/or its subsidiaries. Date 09/25.