If you’re investing in real estate for the first time, you probably have lots of questions. After all, there are so many options and strategies available. It can be overwhelming! But let’s focus on one of the bigger decisions investors must make: To invest in older properties that require renovation or opt for shiny, brand-new builds.

Believe it or not, we’re not here to “sell you” on one or the other. If you know us, you know we invest in both renovated properties and new build-to-rent (BTR) properties. If you're building a buy-and-hold portfolio, the answer isn’t one-size-fits-all—it depends on your goals, strategy, and risk tolerance. Let's break it down.

Option 1: Older Properties

There’s something noble (and financially rewarding) about breathing new life into a tired home. You can reasonably see revitalizing older properties as a way of serving the neighborhood and broader community, as it can help property values in the area. There’s a reason Investors love older houses…namely for their value-add potential…but there’s no denying the extra work involved.
Let’s talk pros and cons.

Pros of Investing in Older Properties

Lower Purchase Price: Older homes typically cost less, especially if they require some TLC. This makes room to create better price-to-income ratios after renovations.

Forced Appreciation: Upgrades to kitchens, bathrooms, and flooring can significantly boost property and rent value. That, in turn, can create higher cash flow.

Established Neighborhoods: Many older homes are in central, high-demand areas with excellent schools, convenient transit, and long-term desirability. The infrastructure is in place to sustain long-term demand.

Tax Advantages: Renovation costs may be depreciated or deducted, providing extra tax benefits. Plus, older homes tend to have lower assessed value—thus, lower property taxes—and an established tax history that makes bills more predictable.

Cons to Watch For

Unpredictable Renovation Costs: Surprises behind the walls can be havoc for your reno budget. For investors, buying turnkey (when renovations are already complete) is often the safer bet.

Higher Ongoing Maintenance: Even with renovations, older homes can come with “quirks” that require a bit more maintenance. 

Longer Vacancy Periods: If you're renovating after purchase, the property will be vacant until the work is done. That costs you time and income. (Another reason buying turnkey properties is advisable!)

Hidden Risks: Asbestos, lead paint, and foundation issues... Older homes can have expensive surprises! Be aware of common problems in houses of the era and understand what remediation looks like.

Option 2: New-Build Investment Properties

New construction offers a low-hassle, high-efficiency investment model—perfect for investors who want clean lines and clean spreadsheets. If they’re BTRs…well, even better!

Pros of Investing in New Builds:

Turnkey Ready: No waiting for contractors or permits means near-immediate cash flow. 

Minimal Repairs and Maintenance: Everything is brand new and often under warranty. Maintenance costs become a lot more predictable. 

Resident Magnet: Renters love modern features, open floor plans, and energy-efficient systems. That “new house” feel is always attractive!

Energy Savings: New appliances, insulation, and windows mean lower utility bills.

Builder/Developer Incentives: Some developers offer perks such as closing cost assistance and resident placements. This is particularly true for BTR communities.

Downsides of New Construction:

Higher Purchase Price: You’ll pay top dollar with little wiggle room for negotiations. You don’t buy new construction looking for deals.

Limited Immediate Appreciation: Without improvements to force appreciation, your equity gains rely entirely on market movement, which can be slow in developing areas. This isn’t a deal breaker for buy-and-hold investors, but it’s worth keeping in mind.

Further Reading: Everything You Need to Know About Maximizing Investment Property Equity

Suburban Locations: New developments tend to be farther from city centers, which may affect rental demand or pricing. At the same time, the suburbs are increasingly the place to be! Research the area thoroughly before making a commitment.

Variable Construction Quality: Not all builders are created equal. Some cut corners and do shoddy work, leading to issues down the line.

At a Glance: Side-by-Side Comparison

Final Thoughts: Which Strategy Is Right for You?

Between older homes and new builds, there’s no wrong answer, just different strategies for different investor personalities. Turnkey companies, such as ours, do the heavy lifting for you, whether with old or new properties. Your portfolio can easily incorporate a mix of the old and the new. What matters is positioning yourself in the right market with the right turnkey partner.

Start investing with REI Nation, where you invest and we handle the rest!