Whether you’re thinking about buying a home to live in or to rent out for investment income, the first decision you have to make is whether you build a brand-new home or a resale home.
There are perks to each style, but you’ll find that there are distinct advantages to building brand new.
When you buy a brand-new home, you can count on quality construction, minimal maintenance, modern features, home warranty protection, and greater investment income.
Here are six benefits of buying a new home you may want to consider.
Avoid Unpleasant Surprises Later
When buying a home, you have to think about the condition it’s in. Resale homes come with a degree of uncertainty.
- Was the home well-maintained?
- Were repairs and additions done to code?
- Will the home meet current code guidelines down the road if you decide to renovate or add an addition?
Usually, these issues will turn up when you have a home inspection done, but there are often surprises like outdated electrical systems or hidden water damage that come out when you’re making renovations or repairs.
Even if your resale home was well built when it was new, codes change over time. This could be particularly troublesome if you’re looking to rent the home to tenants - they tend to prefer the newest and best models.
New homes are subject to up-to-date building codes, municipal and warranty inspections from start to completion. With a new home, you know there are no surprises lurking in the walls. You can be sure every element of your home was built to code and no issues are waiting to be discovered later.
One of the major benefits of a new construction home is the greater selection of communities you can build in. Many of Edmonton’s newer and hotter areas will only have new construction available, so you’ll have a lot more options in that regard.
This can be especially beneficial for an investment property, as tenants usually want to live in newer, more upscale areas. By owning a building in one of these popular communities you can expect your home to generate a lot more income from rents.
Another factor to consider when buying a new vs. a resale home is the overall energy efficiency of the building. Older homes will naturally be less efficient as they were built to less strict guidelines, and over time will tend to develop drafts and leaks. With a new home, this isn’t as much of a concern.
This benefit isn’t just about being environmentally friendly either - fewer drafts and leaks means fewer repairs, less money being spent on heating and water bills, and happier tenants who’ll pay more for a house that’s cozy during the winter.
All of these things add up to more money in your pocket at the end of each month.
Minimal Maintenance and Repairs for Years
Resale homes don't just come with the potential for hidden problems. Some of them are right out in the open.
During your home inspection, you should have received details about the age of some of the things in your home. If the appliances, HVAC system, and roof are only a few years old, you shouldn’t have to repair or replace them soon.
However, these repair and maintenance costs are going to come up eventually. If you haven’t planned for them, you might be in trouble. For instance, a new furnace could cost $5,000 and a new roof might cost $10,000 or more.
Something else to note: some homeowners aren’t always up-to-date on their maintenance. The average furnace might last 15-20 years, but that’s assuming the homeowner does the annual maintenance. If they haven’t maintained it properly for five years, it could break, and the cost of repair may be more than the cost to replace it.
What’s worse? Well, if you’re renting out the home, this means a significant disruption to your tenants or, if you decide to do the repairs in between tenants living there, a lot of lost rental income while the repairs are underway.
A brand-new home comes with years of worry-free use and dramatically reduced maintenance needs. You’ll get warranties on the home itself, the materials used to build the home, and the appliances inside. You can rest easy knowing everything is new and in good working order, requiring no more than routine maintenance for many years.
As an investment property, this is great for you, the investor. A 10:00 pm phone call in the middle of January about the furnace that just quit? Not happening.
Easy to Customize the Details of Your Home
A resale home can be a great choice if you're flexible with your wish list and you're comfortable with a home that was designed around someone else's aesthetics and lifestyle. After all, you can renovate and customize a resale home after you move in - if you have the time.
Just make sure you’re considering the big picture: renovations later means loud, time-consuming construction, a variety of design limitations, and higher prices than customizing new construction.
Structural changes, in particular, can be cost-prohibitive after a home is complete. Moving doors, adding a fireplace, or adding a legal rental suite during construction can be much easier. If these are the kinds of changes you’re thinking about in a resale home, make sure to consult with a contractor to determine whether or not your ideas are even possible.
Building a new home gives you greater freedom to customize virtually every detail of the home. Choosing these elements before the home is built is typically easier and more affordable than making changes to an existing structure later.
Here are just some of the areas you can personalize in your new home:
- Interior paint colours
- Floor plan to fit your needs or your tenants’ needs
- Multiple locations to select from
- Basement development
- Adding popular options like window coverings, decks, fencing and landscaping
As an investment property, you can look at options such as:
- A legal basement suite with a separate entrance or a garage suite
- Separate mechanical systems and laundry for each suite
- Extra parking allocations
You can truly make a new home perfect - for yourself or for tenants - from the very beginning and within your budget; rather than living with or paying for the upgrades and finishes someone else chose for their home.
There's an added bonus to making these changes to a new home rather than a resale home: they'll be covered by your new home warranty.
Home Warranty Protection for 10 Years
When you buy a resale home, you have to consider how well the home and systems have been maintained and how long until something needs to be repaired. A major benefit of buying a new home is it comes with new home warranty protection for your peace of mind.
- Under the Warranty Program you’re protected against defects with 1-2-5-10 coverage:
- 1-year protection on Labor and Materials - This takes care of finishes throughout the home, including any defects in flooring, paint or trim.
- 2-year protection on Distribution Systems - This primarily covers defects in labour and materials related to heating, plumbing and electrical systems.
- 5-year protection on the Building Envelope – This covers the exterior shell of the home, including the roof and walls.
- 10-year protection on Structure - This covers the key structural components of your home, including its frame and foundation.
Resale and new homes each have benefits and choosing between the two is a big decision to make.
While a resale home is often cheaper upfront, we feel that overall a new home represents a more solid investment, as you’ll be able to charge higher rents, spend less on repairs and maintenance, and save yourself a lot of long-term stress knowing there won’t be any unpleasant surprises popping up at inopportune times.
A new home can give you a worry-free home customized to your precise needs and style with valuable home warranty protection for additional peace of mind.
Originally published April 10, 2019, updated Oct 22, 2020