Build new or buy
existing - which wins?
Compare cap rate, cash-on-cash return, and total ROI over your holding period for building a new investment property versus buying a comparable existing one.
Modeling a single deal in more depth, or a build-and-sell exit instead of a rental? Try the Investment Property Calculator.
Build vs. buy, side by side.
Planning estimate only, not investment advice. Assumes taxes, insurance, maintenance, and vacancy together run about 40% of gross rent for both scenarios (the real-estate investing "50% rule," adjusted toward its lower end), and a 30-year loan term. Actual costs, financing terms, appreciation, and rents vary by property and market.
It depends on your numbers. Building new usually costs more upfront but can command higher rent and lower near-term maintenance, while buying existing is often cheaper to acquire but may need repairs sooner. Comparing cap rate and total ROI over your actual holding period is the clearest way to decide.
In DFW, cap rates commonly range from about 4% to 8%. A new build typically lands on the lower end of that range because it carries less near-term repair risk, which investors often accept in exchange for a lower cap rate.
No, this tool compares long-term rental economics once a property is complete and rented. For construction-phase financing costs on a new build, use the Construction Loan Payment Estimator.
Writing a guide for DFW homebuyers or homeowners? Feel free to link to this tool — here's a ready-to-paste credit if that's useful.
<a href="https://zencorehomes.com/tools/build-vs-buy-roi-calculator/" target="_blank" rel="noopener">ROI Calculator: Build vs. Buy Investment Property</a> — free tool by <a href="https://zencorehomes.com/" target="_blank" rel="noopener">Zencore Homes</a>More free tools
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