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New homes can bring profits to buyers, investors

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In a housing market with limited inventory, buyers have a few options: They can wait for their dream home to hit the market, they can build on vacant land or they can purchase a newly built home in a desirable neighborhood.

“To the general public, ‘spec home’ has no meaning, but it’s a speculative house,” said Randy Mann, owner of Great Lakes Land Co. “In this case, you’re getting a brand-new product with a new roof and new plumbing, and there are many advantages to buying a brand-new home.”

Buyers and investors can make the best of a growing market by putting money in a new home as it’s being built instead of waiting for construction to be complete.

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Buyers Can Take Advantage of One-Stop Shopping

Buyers looking for a new home can purchase one before it’s built, Mann said, without the uncertainties of designing or managing the construction process.

Buyers looking for a newly built home can walk through a similar house before the finish date, then commit to the buying process with the bank. This quick connection with a lender simplifies the home-buying process.

A broker like Great Lakes Land Co. can connect buyers with lenders to secure financing before the spec home is finished.

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“It’s one-stop shopping at that point,” Mann said. “You’re getting a brand-new home, and it’ll be fully built and ready at a certain time. When it’s done, you’ll get occupancy and you move right in.”

New Homes Are Turnkey Ready

Mann said buyers are now looking for new homes because of the low inventory of existing or older homes available for sale in the Traverse City market.

If buyers find an older home that they like, they should jump on it, Mann says, but for those looking to build, there are always added benefits to a newly built home.

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“When you think about a brand-new home, the roof is not going to leak and you’re not going to have immediate plumbing problems,” Mann said. “You’re not going to have all of these potential issues that pop up when you buy an older home.

“With a new home, you’re getting a brand-new product, but it’s like buying a car, where you get it and can take it that day.”

Spec Homes Are Market Entry for Real Estate Investors

Spec homes are also an opportunity for investors looking to expand their portfolio into the real estate market.

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By investing in a spec home, investors can make a return on their money when the property is purchased.

“We work with a lot of people who have money in self-directed IRAs and self-directed 401(k)s and want to get involved in real estate,” Mann said. “The IRS allows these in certain accounts, but most people start with the stock market.

“Land or even a house in Traverse City or nearby is a phenomenal opportunity for an investor.”

Opportunities Open for Spec Home Availability

Mann said that Great Lakes Land Co. will be offering new homes for sale as early as spring 2024. These new homes will have renderings for buyers to start shopping even before the homes are built.

Learn more about how to buy spec homes from the experts at Great Lakes Land Co.

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