6 Reasons Why New Construction is Winning This Year

Dusty Rhodes • March 10, 2025

In today’s rapidly evolving real estate market, new construction rental properties are emerging as the clear choice for savvy investors. Rising maintenance costs, inflated insurance premiums, and escalating material expenses make older homes less appealing to landlords and tenants. Meanwhile, modern, energy-efficient homes meet tenant expectations while providing landlords with reduced operational costs and higher long-term returns.


Our partners at Rent To Retirement specialize in helping investors navigate these challenges and capitalize on the growing demand for new construction rentals. Let’s dive into the data and why this trend reshapes the rental property landscape.


1. Maintenance Costs: Why Older Homes Are Draining Your Budget


Maintaining older properties is becoming increasingly expensive. Systems like HVAC, plumbing, and electrical wiring often require costly repairs or replacements, especially in homes over 30 years old. 


According to the National Association of Home Builders, homes built before 1960 incur annual maintenance costs averaging 8% of the home’s value, compared to just 2% for homes built in the 2010s (HomeKeep).


How new construction helps:

  • Modern materials and systems require fewer repairs.
  • New builds often come with warranties covering significant components for up to 10 years.
  • Reduced maintenance translates to higher profitability and less time spent managing repairs.


2. Insurance Premiums: A Hidden Cost of Older Homes


Insurance companies charge significantly higher premiums for older homes due to their increased risk of damage. The average premium for a home older than 30 years is 75% higher than that for a newly constructed home (The Zebra).


Why new builds are cheaper to insure:

  • Compliance with modern building codes reduces risk.
  • Disaster-resistant features like hurricane windows and reinforced roofing lower premiums.
  • New homes are less prone to fires, floods, and structural failures, keeping insurance costs manageable.


3. Tenant Preferences: Modern Amenities Matter


Tenants are becoming increasingly selective about where they live. According to a RCLCO survey in 2023, 37.3% of renters stated they would be willing to pay more for new kitchen appliances, while an additional 50.7% indicated they might consider paying higher rent for them. Outdated layouts, inefficient systems, and cosmetic wear and tear in older homes drive tenants toward new construction.


What tenants want:

  • Energy-efficient appliances and systems that lower utility bills.
  • Open floor plans and modern designs.
  • A move-in-ready experience with minimal maintenance issues.


New construction properties can command higher rents and maintain lower vacancy rates by offering what tenants demand.


4. Rising Construction and Replacement Costs


The cost of materials for repairs and renovations has soared. New construction has had to deal with the exact cost increase, but renovation projects have become even more costly, equating the time value of money.


New construction advantages include:

  • New properties are built with durable, standardized materials that are easier and cheaper to maintain.
  • Investors avoid the costly, time-consuming process of renovating older homes.


5. Insurance Challenges in High-Risk Areas


Insurance premiums have become a significant hurdle for landlords in many regions like Florida and California. Insurers are scaling back coverage or exiting markets entirely due to increased natural disaster risks. According to Reuters, some homeowners in Florida saw premiums increase by over 60% from 2019-2023. (Reuters).


Why new construction is resilient:

  • Built to withstand natural disasters with hurricane-proof windows and elevated foundations.
  • Lower insurance costs and reduced risks make these properties more viable for long-term investments.


6. Energy Efficiency: A Win for Landlords and Tenants


Rising energy costs are driving demand for energy-efficient homes. Investing in new construction homes offers significant energy savings compared to older homes. According to the U.S. Department of Energy, LEED-certified homes use 20% to 30% less energy than non-green homes, with some homes achieving up to 60% savings.


Benefits for investors:

  • Attract environmentally conscious tenants.
  • Qualify for tax incentives and rebates.
  • Reduce operational expenses over the long term.


Invest in New Construction for Long-Term Success


From lower maintenance and insurance costs to tenant demand for modern amenities, new builds offer a strategic edge in today’s challenging market. Whether you’re a seasoned investor or just starting your journey, new construction rentals provide a path to profitability and peace of mind.




Source: Bigger Pockets Blog


Dusty Rhodes Properties is the Best Realtor in Myrtle Beach! We do everything in our power to help you find the home of your dreams. With experience, expertise, and passion, we are the perfect partner for you in Myrtle Beach, South Carolina. We love what we do and it shows. With more than 22 years of experience in the field, we know our industry like the back of our hands. There’s no challenge too big or too small, and we dedicate our utmost energy to every project we take on. We search thousands of the active and new listings from Aynor, Carolina Forest, Conway, Garden City Beach, Longs, Loris, Murrells Inlet, Myrtle Beach, North Myrtle Beach, Pawleys Island, and Surfside Beach real estate listings to find the hottest deals just for you!

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