Does it ever make sense to invest in new construction SFRs for rentals?

[James Park]

I wanted to get your opinion about my SFR rental investment strategy. I've always been attracted to SFRs over commerical, multi-family, and apartments. I've always liked to build new and the past three real estate i bought were all new construction.

Most of the SFR and multi-family investors i see here on BP seem to have a fair amount of rehab skills and buy distressed properties REO & Short sales and either fix, rent or flip them. They also seem to live by the 2%/50% rule.

I target the "A" neighborhoods in the northern Altanta suburbs within High School clusters that are within the top 1% in the state. In the Atlanta market the more apartments and multi-family units are within a school cluster, the lower the ranking is for that high school. Here, in the northern suburbs of Atlanta, schools are what drives the demand for real estate.

My farm area that search daily for houses doesn't have any condos, townhomes, apartments or mult-family units. I try to buy into the entry level subdivisions that feed into the best high school clusters. Do you guys think that this is a viable long term strategy for building a portfolio of SFR rentals?

Here is a deal i am looking to buy in the next 2 months.

Demographics profile.
Median home price in this cluster is $380,000
Median household income is $140,000
High school ranked #5 in state: middle school #3 in state and elementary #2 in state.
No apartments and multi-family and lowest rent listing is $1700.00/month and the rental inventory in this area is 1.7 months.

I am looking to buy a new construction SFR 4 bed/2.5 bath 2800 sq/ft on .25 acre lot.

Price: $170,000

Rent: $1700
Mortgage: $608.70
HOA: $50
Insurance: $50
Tax: $141.66

Down payment $42,500 - 25% down
$10,195 annual cash flow
24% cash on cash return

At the moment, I don't have much rehab skills but from my limited experience my rental that I bought new in 2006 has been rented to a corporate executive transfer for 6 years now. The tenant has kept the property in excellent condition and i did not have to put any money in the home as the tenant has kept the property up with his money.

Should i pull the trigger on the new construction SFR?
I plan to buy and hold this home for 8-10 years.