Real estate can yield the unexpected to the right investor. The sector has not been immune to the worst impacts of the ongoing Covid-19 pandemic. Yet, what is interesting is that there is no shortage of wise investment options for a smart investor. In simpler terms, despite the slowdown due to the pandemic, real estate has opened a plethora of new opportunities for high-yield investment.
A smart investor needs to be familiar with the continually altering real estate scenario. The sector has a constant demand for innovative and challenge-specific investment strategies.
For example, In the recent past, the real estate sector has become more accessible to ordinary investors. The industry has witnessed long-standing domination by well-established and affluent investors. They also enjoyed exclusive access to the most premium deals. Around 2020, the barriers have come down significantly. Public funding opportunities such as crowdfunding is an apt example here. Through such opportunities, investors of different income levels can be a part of lucrative real estate deals.
The first step towards a successful real estate investment is identifying current market opportunities, both the conventionally trusted and potential opportunities. Besides, a well-researched approach powered by a flexible outlook and forethought is a must to leverage those opportunities effectively.
Here are some of the potential strategies that current investors of 2021 might find beneficial.
Choosing the World’s Potential Places
Across the world, and despite many changes, the core principles of real estate remain the same. All investors like to invest in places with higher returns on investment. Areas that guarantee higher rental occupancy, which is in sync with the investor’s mortgage repayments, are always in high demand. The other aspect to consider while finalizing on an area is to ensure the tenant default rate remains minimal.
A smart real estate investment is also about in-depth research and market timing. Many times, cities with exceptional rental income may often have limited inventory. One should act wise and quick to secure a property worth your investment criteria in such a scenario.
However, decisions based on impulse or partial knowledge can be disastrous here.
There are several places with a proven history of being a long-term real estate hub with desirable supply and demand statistics. Researching on such sites will lead to a good start.
Availing a regional real estate management firm’s services will help locate tenants for the intended property, especially if the place is new to the potential investor.
Places with a comparatively diverse economy would be another feasible option as there would be a niche for residents of varying income levels. Also, some areas may extend permanent employment opportunities due to some of the popular industries’ presence.
Other criteria for a potential real estate sector is considerably constant employment and population growth.
Shifting Focus Towards the Fix and Flip Arena
The previous year presented a constantly altering landscape for investors interested in the fix and flip sector. House flipping happens when an investor buys a distressed or outdated residential property at significantly lower rates, renovates and resells at a higher rate.
The demand for newly renovated residential houses appears to be high. Thriving on this demand, the fix and flip sector is expected to be abuzz with activities. However, investors should be careful with their numbers as competition may increase, placing a considerable emphasis on the returns.
House Hacking
House hacking is essentially about purchasing a property with the objective of paying off your mortgage through rentals. Mostly, house hackers live in their respective homes and give its rooms out on rent. In other words, house hacking enables one to live totally for free or nearly for free after purchasing a multi-unit property. The rental income is then directed towards paying off the mortgage.
Although house hacking is a great option to enter real estate, it is essential to thoroughly understand the respective area’s rental market conditions where the potential investor is planning to purchase a property.
Multiple entry points to the rental rooms, feasible cost, and a good location are key to buying a hacking property.
