3D printing, something that started as a way to rapidly build complex parts for manufacturing businesses, has been around since the 1990s. Unlike document and photo printers which can only function in 2D, 3D printers can build 3 dimensional objects out of a variety of materials, where the material is layered on top of each other.
Today, 3D printing technology isn’t just used to create geometrically shaped product parts, but also to build fully engineered prototypes and finished products from scratch, from rocket manufacturing to tiny homes. Early this year, a 3D printed home was listed in the New York MLS for $299,000. The home came complete with 3 bedrooms, 2 bathrooms, and a 2.5 car garage. It was constructed by a custom 3D printing company, SQ4D Inc.
This article would consider the gaps that 3D printing fills in real estate construction and rental property investing and what to expect in the future with 3D printed homes.
Faster house completions
Currently, there is less housing for sale in the US housing market 2021 compared to 2019. The reason for this is seller uncertainty as most homeowners have to buy after they sell. Prices are high in many markets. According to Mashvisor’s real estate data, the average property price increased by 7.2% between January/February and October 2020, and this upward trend is continuing in 2021. This is leading to a feedback loop where inventory shortage leads to bidding wars and further drive prices up.
It’s up to the construction industry to step up. Compared to anytime in the last decade, new house construction has been substantially ramped up. There are 1.88 million building permits issued for 2021. NAR chief economist Lawrence Yun predicts that new home sales will jump 21% and existing home sales will climb 9% in 2021. While new construction skews in favor of single family homes, multifamily apartments would also see a bump in inventory with the adoption of 3D printing.
Currently, the largest 3D printed house is a 31-foot-tall apartment complex in Dubai. The city collaborated on the building with Boston-based 3D printing construction company Apis Cor, which also built a house in Russia that went up in less than a day.
3D printed homes are estimated to be completed 3x faster than traditional counterparts. 3D printing also requires less labor, reducing the cost of construction.
Lesser prices on new construction
SQ4D’s new construction was priced 50% below other new construction houses in the area, and it has currently received over 1,000 offers, according to the builder. From the point of view of real estate investors, this means that how to get a 3D printed house might not be an easy thing.
One of the major uses of 3D printing will be in affordable housing construction – a place where prefabrication rules. A reason for the cheaper prices of 3D printed homes arises from the fact that this method allows for the use of less conventional material. This is important in a time where green and energy-efficient building materials are in vogue.
For example, instead of the conventional wood and nail finish, Mighty Buildings, a modular home construction company, uses thermoset polymer composite to build 3D printed homes on demand. According to Mighty Buildings, these “3D printed prefabricated homes can cost up to 45% less than conventional on-site construction and 20 to 30% less than traditional prefab for comparable size and quality”.
Human participation still required, but less
Housing processes have largely been the same since the 1900s – time and labor intensive. Although 3D printing provides a way to automate building construction, it can only be used to build the framework of a house – i.e., the walls, interconnected structures, and, sometimes, the roof. All other aspects of the 3D building must be completed by humans, i.e., doors, windows, plumbing, electrical, etc.
Hence, it’s possible to get a home that’s cheaper and faster to build and still meets the local building code. Apis Cor, a Russian company that was the first to build a 3D printed home, completed the home in 24 hours. They made the 3D printed house out of a concrete mixture that’s estimated to last for 175 years. The Apis Cor’s 3D printer required only two people to operate it, which is one of the factors that make 3D printed homes more affordable than standard investment properties.
3D printed communities
House builders like ICON and Mighty Buildings have 3D planned communities underway. ICON is building a community of 50 3D printed houses in rural Tabasco, Mexico. Mighty Buildings is constructing a community of 15 eco-friendly 3D printed houses across 5 acres in Rancho Mirage in the California real estate market. It’s easy to imagine more home building companies following suit, creating planned communities of 3D printed homes since these types of homes are cheaper and more efficient and meet local building codes, thus eliminating one of the main worries in real estate investing, namely: How much does a house cost? In Eindhoven, Netherlands, Van Wijnen, a developer, is building a community of five 3D printed, architecturally cute houses that will meet modern comfort requirements and will be listed and sold by a real estate agency.
Accessory dwelling units and tiny Airbnbs
Tiny 3D printed homes might be the future of Airbnb investing
3D printing seems to be more widespread when it comes to building tiny homes. A tiny home is a stand-alone house with a compact interior space, usually less than 400 square feet. An accessory dwelling unit is a second, small dwelling usually on the same grounds or close to your regular, single family home. It’s a way to increase the value of your current home. It’s also called a guest house, converted garage, basement apartment, and others.
Tiny homes and accessory dwellings can be completed in 2 weeks at generally below $15,000 when constructed as 3D printed homes. Currently, Airbnb allows tiny houses. These homes are much less cheaper for renters and also come with all the bells and whistles for a one-of-a-kind experience.
If you’d like to list 3D printed homes as tiny rental properties on Airbnb, you can use Mashvisor’s real estate investment software to conduct rental property analysis to see what Airbnb income, Airbnb occupancy rate, cash flow, cash on cash return, and cap rate to expect.
What do these all mean for investors?
Former President Barack Obama said at the 2013 State of the Union Address that 3D printers had the potential to revolutionize the way we make almost everything. Less than 10 years from that time, we are seeing the development of planned 3D communities in the housing market. The potential is huge, and 3D printing may in fact be the future of real estate construction as well as the future of real estate investing.
Odds are that as 3D printing continues to develop, a 3 bedroom, 2 bathroom investment property in a place like the Austin real estate market would cost just $100,000, while they will probably be able to rent out for rates similar to the standard ones. And these new construction homes would only take a couple of weeks from approval to completion. We’ll probably see the prices of homes drop significantly as there will be larger inventory. And investors who are interested in buying 3D homes to rent out will be able to use Mashvisor’s real estate investment tools to choose the most profitable opportunities. It’s good timing because right now housing inventory is low, and affordability is becoming an issue, creating more market opportunity for 3D printed homes for sale.
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