To make a substantial profit from real estate investments, you have to strive always to be ahead of the curve. The housing market can change rapidly following political, social, or economic trends.
A plan that sounds good today might delve into irrelevance in two or five years. However, if you jump at a new idea, you can take advantage of lower competition and lower prices. Joining a trend at its peak means fighting other investors who might have a larger capital than you.
Read on to discover the newest trends in real estate investing. This will help you determine what’s the best way to expand your real estate portfolio or simply raise your profit.
#1 Affordable Housing
The disparity between wage increases in the last few decades and the prices for residential real estate has been causing a lot of frustration lately.
The rental housing market is huge compared to the number of home purchases since mortgage rates have risen dramatically too. Real estate has become prohibitive for a large part of the population in metropolitan areas. With little chance of buying, a higher number of people resort to renting.
Another issue is that affordable housing options are insufficient especially where they’re needed most: in or within close distance to large metropolitan centers.
Leaving aside concerns about capital requirements, there are ways for any real estate investor to take advantage of this situation and meet a stringent need of the market. A rising trend is investing into manufactured homes for income.
Built with significantly lower costs than site-built homes, manufactured homes are popular among tenants who value affordability. But they also generate high cash flow for investors. The lows costs of purchase are attractive as well.
#2 Generous Amenities
Attracting high-quality tenants is a top priority for real estate investors. Good tenants take care of your property, pay the rent on time, respect the rules in the community, and are easy to communicate with.
However, as a real estate investor, you need to provide high-quality tenants with an incentive to choose your property. Most property owners decide to be generous with the amenities for precisely this reason.
Parking access, a swimming pool, or a gym have always been key selling points in real estate, but emerging trends push property investors to go even further. Communal gardens, golf courses, greenbelts, or movie theatres are only a few examples of amenities that investors consider today.
Before adding a new investment property to your portfolio, determine the range and quality of the amenities. Each type of property has a minimum range of amenities that a tenant will consider acceptable.
A tenant seeking a luxury property might not tolerate the lack of a smart home system, for example. Besides, the more you can invest in your property, the higher you can set the rent.
#3 Second-Tier Locations
Location determines the potential of an investment property. With this in mind, most real estate investors and buyers have focused for decades on top-tier cities.
Naturally, fierce competition has led to a high increase in real estate prices. Especially for first-time investors, this can be discouraging. However, there’s a current trend that can benefit investors with smaller capital. The new trend is to focus on promising second-tier cities.
This real estate investing strategy is based on the assumption that as investments in second-tier locations will increase, real estate prices will also rise.
Because more capital is transferred to a second-tier location, the value of real estate properties grows accordingly. The chances of making a good profit with a property in a second-tier city are high enough that many investors are willing to test this strategy.
The results, however, might take years to show.
#4 Last but Not Least: Marketing
Using efficient marketing to raise the profile of your investment property is not a new trend. Yet, marketing itself is all about new trends. If you want to implement successful promotion strategies, you need to follow innovations in real estate marketing.
A few examples are social media campaigns, aerial shots, or virtual tours. Hesitating to implement new marketing ideas will give your competitors more leeway.
Being a real estate investor is not as easy as buying and renting a random property and then waiting for the monthly rental income to appear in your bank account.
If you want real returns on investment, you need to stay informed about the latest trends and changes in the market, so you can make profitable decisions. Acting fast can sometimes compensate for a lack of massive capital.