Why Choose New Development To Invest In?

Why Choose New Development To Invest In?

If you are still with us, you’ve likely decided that passive real estate investing might fit in your overall investment portfolio.

So far, I have explained why Steve and I have decided to create private investments opportunities, what the benefits are in comparison to traditional investments and what your role would be in such an investment. (If you missed the beginning of our series, you can find the newsletters HERE).

I have, hopefully been clear on the reasons why we are choosing to invest in multiple assets instead of a single project and why we have chosen to make those assets be of different types (commercial, industrial, multifamily). The last piece of our strategy is why we have chosen new construction over existing assets.

You probably think we chose new construction assets because we are builders. That is partly true…. but I want to explain why there is so much more to that decision.

FIRST....THE ASSET CLASS ITSELF HAS MANY ADVANTAGES:

Lower Maintenance Costs

ADVANTAGE: Since everything in a new development is brand new, there is typically a significant reduction in maintenance costs and fewer unexpected repair expenses in the initial years.

IMPACT: Lower operational costs translate to higher net income and potentially higher returns on investment.

 

Customization and Branding Opportunities

ADVANTAGE: Investing in a new development allows for customization to meet current market demands and brand alignment. This can include designing spaces for specific tenant needs or creating a unique community atmosphere.

IMPACT: This flexibility can enhance the appeal of the property and differentiate it in a competitive market, attracting premium tenants or buyers.

 

Appreciation Potential

ADVANTAGE: New developments often see significant appreciation as they transition from construction to stabilization. The value of the property can increase substantially as the surrounding area develops and infrastructure improves.

IMPACT: Early investors can capitalize on this appreciation, leading to substantial capital gains.

 

Attraction of High-Quality Tenants

ADVANTAGE: New developments with state-of-the-art facilities and modern amenities are attractive to high-quality tenants, including businesses looking for premium office space or individuals seeking luxury residences.

IMPACT: High-quality tenants are more likely to pay premium rents and have lower turnover rates, contributing to consistent income streams.

 

Financing and Tax Incentives

ADVANTAGE: Projects can be built to specifically take advantage of government incentives like energy tax credits and also accelerated depreciation

IMPACT: These incentives can improve the financial viability of the project and enhance overall returns. Tax incentives are often significantly higher.

 

While investing in existing real estate has its own merits, such as immediate cash flow and established market presence, new development real estate offers a dynamic and potentially more profitable avenue for investors looking to capitalize on modern design, lower maintenance costs, and market trends. The ability to leverage new technologies, benefit from tax incentives, and increase revenues through building practices, cemented our decision to go all in on new development real estate investing.

I hope you have enjoyed the newsletters so far. If you would like to further your investment education consider joining our StoneCrest Equity Alliance where you will be the first to know about upcoming opportunities, get invited for exclusive site visits and receive even more in depth knowledge on syndications.

We are planning an in person event to show off our apartment complex that is currently in construction. If you would like to be invited to this July event RSVP here.

As always, we are here to answer your questions and help you achieve more wealth.

This document is solely for informational purposes and does not constitute an offer to purchase a security. Securities will only be offered pursuant to a private placement memorandum in reliance on certain exemptions from the registration requirements of the Securities Act of 1933 (primarily Rule 506(b) of Regulation D and/or Section 4(a)(2) of the Act) and are not required to comply with specific disclosure requirements that apply to registrations under the Act.
Investing involves many risks, variables, and uncertainties. No representations or warranties are made that any investor will, or is likely to, attain the returns shown above since hypothetical or simulated performance is not an indicator or assurance of future results.