MARKET & TRENDS
STAYING POWER
Will 3 Current Real Estate Investing Trends Hold for the Future? SUCCESSFUL INVESTORS ARE AWARE OF THE LATEST TRENDS AND KNOW HOW TO ADAPT.
by Greg Slaughter
At the same time, prices continue to increase, although at a much slower pace, and rent increases across the country have now stabilized. So, although the market likely isn’t going to crash as some suggest, it is changing. What does this mean for real estate investors—and is there an opportunity? There are pros and cons to every market change, and there are always opportunities if you know what to look for. With the recent market changes, one could argue that purchasing a rental property through traditional means with a mortgage and holding it with a long-term tenant is becoming too difficult to be profitable. It would therefore follow that the trend of short-term rentals will become stronger while the trend of long- term rentals declines. Yet investors that understand creative financing with “wraps” and “subject to’s” are licking their chops to enter the market and grab as many properties as possible. These financing strategies have been extremely difficult during the recent super housing boom but will open up as inventories climb and it takes longer to sell a home. All
he real estate market is always changing, and it can be tough
people realized that investing in property was a great way to secure their financial future. 3 Short-term Rentals and Airbnb. There has been some shift away from traditional forms of real estate investing such as flipping houses and buying long-term rental properties. Instead, many investors are turning to newer strategies such as short-term rentals and Airbnb investments. This is likely because these newer strategies offer a higher return on investment than traditional methods.
T
to predict what the future will hold. Still, there are currently three trends we are seeing in the world of real estate investing. Let’s take a look at them and how they are likely to change in the years ahead. THREE TRENDS 1 Hedge Funds. During the past decade, hedge funds have been entering the market and buying tens of thousands of homes across the country and turning them into rentals. Although his trend has significantly slowed the last couple of years, hedge funds still own a lot of rentals across the country. 2 Rentals. During the past several years, investors have had an increased interest in investment properties as rentals. These investors have been scooping up homes and renting them out. This trend is likely due to a combination of factors, including the state of the economy and the histori- cally low interest rates. More
WILL THESE TRENDS CONTINUE?
Only time will tell if these trends will last. But one thing is for sure: The real estate market is always changing and evolving, and now is certainly no exception. We have already seen signs of a changing market the past 3-6 months. There has been a significant rise in interest rates, decreasing home demand. Lower demand has resulted in a longer time on the market for homes and an overall increase in inventory of homes for sale.
64 | think realty magazine :: september - october 2022
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