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Planning Your Next Real Estate Investment: Key Takeaways to Consider from 2020

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Sifting through the best real estate investment options is a difficult enough task as it is. Even under ideal circumstances, anticipating the fluctuating market conditions is largely a game of making well-informed, yet uncertain, guesses based on what strategies have proven to be effective in the past. But how do you effectively pivot from that approach to adapt to an unprecedented global event such as COVID-19?

For the majority of individuals, the inherent uncertainty of the real estate market has only been magnified by the global health crisis. The conventional modeling protocol never foresaw the impacts of a novel viral outbreak on the globalized industry. This year has seen a drastic shift in market dynamics, with scores of people moving away form high-density urban areas to more suburban surroundings. At the same time, the office market has been flipped on its head, as teleworking options have sprung up and challenged the traditional notion of the workplace.

Still, a significant number of market insiders truly believe that this event has had some positive property valuation implications—but you will need to know how to spot them in order to take advantage. The following is an outlook to some of the most promising real estate choices for 2021.

SINGLE UNIT RESIDENTIAL PROPERTIESReal Estate Investment

Rental property and residential real estate have long been a favorite among those looking for housing options, mainly due to the fact that they are simple, reliable choices in virtually every market. Making an real estate investment in a single unit house is perhaps one of the best routes to take, as it offers both versatility and consistency when it comes to return on investment. Rental property is generally a great source of passive income, even if it does take some time to overturn the initial mortgage expenditure. There will likely be a revolution when it comes to housing spaces in order to cater form the growing work-from home model that will have a significant positive impact on the single unit rental property market—mainly the fact that people are looking for larger spaces that can net investors a greater return and healthier bottom line.

AIRBNB/SHORT-TERM RENTALS

For the majority of people, Airbnb is just another temporary method to make a quick buck on the side; however, this short-stay model of housing has garnered a lot of positive traction in relation to vacation condos and more permanent second homes—making it a great real estate investment opportunity for the upcoming year. People are actively searching for alternative temporary housing options as they are increasingly displaced for one reason or another due to COVID-19 complication. Airbnb can offer a more lucrative return on investment than single unit rental options as it enables the owner to charge a higher rate for a short stay as opposed to a longer-term tenant renting for multiple months. If you can keep your Airbnb consistently occupied, you can expect to generate nearly twice as much as opposed to conventional renting options.

WAREHOUSES

Real Estate Investment

Industrial real estate is anticipated to explode in 2021. The economic turbulence from the pandemic impacted commercial real estate properties far worse than the industrial side. According to data analysis conducted by Forbes, the rent collection rates for big-box warehouses have been nearly 100% despite COVID-19 throwing a wrench in virtually every facet of the economy. With the retail market shifting to a more online approach, the increased e-commerce means that retailers and distributors will be looking for a lot of storage space for their inventories. From an investment perspective, warehouses are ideal in that they are low maintenance and there is a steady stream of potential new tenants ranging from small local retailers to large global distributors. Typically, large warehouse properties that are located proximal to waterways will be the most sought-after.

 

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Planning Your Next Real Estate Investment: Key Takeaways to Consider from 2020 | Gauntlet Funding – Melville, NY


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