New Constructions in San Antonio

[Suraj Nagrani]

Greetings!

I am looking at investing in a newly constructed town home in San Antonio next to the San Antonio river and the Pearl Brewery. The area is called Tobin Hill. The home will be ready in 2016. In your opinions, what are the pros and cons with investing in new constructions? Is anyone familiar with the area and what is going on there? I do understand that new constructions trade at a premium but I feel that in my case (being based out of the country) this will pay off in the long run, and my plan is to buy and hold, and rent the property out.

Look forward to hearing from all of you!

[Seth Teel]

@Suraj Nagrani 

 I live in Tobin Hill, I spent the last 8 months renovating a 1917 build 3 blocks from the River.  If I were to invest in Tobin Hill, I would first look at purchasing & renovating existing housing stock. There are still deals to be had, tons of homes that require renovation, and you'll get much better equity capture (especially if you add square footage).  If you're dead-set a investing a new build, I would look at buying a lot and constructing some infill.  Look on the extremities of the historic district if you don't feel like jumping through HDRC review with the City.  Terramark Urban Homes has been killing it with their infill projects.  Their business model is to buy a lot, sub-divide into small high density lots, and build modern or quasi-modern homes on these newly created "micro-lots."  These places are selling like crazy and the net return is infinitely greater.  As someone who as owned a condo as investment, I steer clear of anything that has HOAs fees.  It would be different if we were in a city with higher density where condos & townhomes are the norm, but we're not.  I am not saying you can't make money, I just think there are easier and safer ways to do it.