As investors, we want to put money into something that increases its value over time. We may even want something we can see and appreciate, perhaps even pass it on as a legacy to our children someday. We’d want an in-demand asset and one that is resilient. When we think of accumulating wealth for short-term or retirement purposes, we can turn to real estate as an investment opportunity for its numerous benefits.
Real estate investments in the form of land, buildings, or a combination of both can provide us with cash flow from rentals or buy-and-sell schemes. When we make some improvements on these properties, we build equity and may even enjoy tax advantages. We can diversify our portfolio by adding real estate into our asset mix and help us survive market crashes.
While these reasons are enough to convince anyone that real estate is a lucrative investment, we’ll need to look into the current market situation to determine which opportunities can give us profit today and, in the years to follow.
Best Markets For Real Estate Investments
Buying real estate often requires extensive research about which type of properties can give the most returns. Aside from considering a property’s location, current and future use, and costs, we also need to think about the purpose and the type of properties we want to invest in.
Do we want a house to stay in and then sell afterward? Or do we want something that can give us passive income? Do we want just one or multiple properties so we can make the most out of our investments? Are these located nearby to manage them quickly, or can we spread our investments across the country or abroad?
When we have a budget and a location figured out, we can then move on to select several properties in the following real estate markets for our real estate investments this year.
- Rental Properties
- Industrial Properties
- Commercial/Retail Properties
- Real Estate Investment Trusts (REITs)
Let’s start investing in rental properties. Homes are always in demand because everyone needs a place to live. We can choose to find rentals that reflect the current exodus of people towards suburbs in search of bigger outdoor spaces and quiet home offices.
We can explore the real estate market in Texas, Atlanta, New Jersey, and San Francisco and invest in single-family home rentals. Make sure to check on the neighborhood before buying rental properties to avoid encountering tenant issues or high vacancy rates to ensure profit from this type of investment.
Vacation rentals are also attractive investments. We all can relate to the feeling of being cooped up and desire a change in the scenery without driving too far. We can look into buying vacation rental properties in Northern Pennsylvania, Lake Tahoe in Nevada, Big Bear in California, Outer Banks in South Carolina, and Eastern Shore in Maryland.
Apart from residential and vacation rentals, real estate investments are waiting on the industrial property markets. The rise of e-commerce comes with growing demand for storage and distribution facilities. We can look for large-scale properties near major highways to make distribution more efficient. Or look for old retail buildings that can be converted into warehouses and fulfillment sites.
When investing in large-scale real estate investment, a tip is to shell out at least 20% for the down payment and find a low-interest mortgage or a personal loan. Or, put more in down payment to have funds for possible repairs and upgrades to turn these spaces into ‘all-season havens’ for relaxation and even extended home offices.
Commercial or retail properties may seem at a low right now as businesses are taking their products online. Most stores and buildings are vacant, and their owners are trying to keep up by selling at lower prices. We can take advantage of lower prices and buy properties in a critical location. Hotels and retail spaces can be transformed into affordable housing projects or multi-family properties.
REITs are an alternative form of owning and investing in real estate. Real estate investment trusts work by pooling money from investors and use it to finance income-generating properties either in the form of rentals or mortgage payments.
While various types of real estate investment trusts, residential and healthcare REITs show the most potential. These two provide housing and access to different healthcare services needed by many. An advantage of this investment type is that REITs also act as property managers for multiple properties, in order to face less financial risk.
In sum, real estate is a welcome addition to our portfolio of investments. Owning physical properties such as residential and commercial rentals can give us passive income, while REITs can increase gains and lessen risk. These markets can give us long-term profit, especially when choosing to invest in in-demand real estate properties in amenable locations.