How does building to rent compare to buying and renovating?

[Jason Paris]

I have some land and I would like to know if it would be a viable option to build new single family units on it to rent? Is building from the ground up comparable to buying a house and renovating it to rent out?

[Anthony Dooley]

Not including places like SFO, NYC, and D.C. it's almost always cheaper to buy and fix than to build new. This is especially true in the current market where there is a shortage nationally and you are paying to dollar for labor and materials. Just do the math for your area per square foot for similar materials. Talk to a few builders and/or appraisers to get a feel of construction costs per sq. ft. However, if there is nothing to buy in your market, then building may be the only way to get inventory.