IT’S LOOKING PRETTY GOOD… Real estate investing is synonymous with and nearly inextricable from risk—you’re taking a chance based on probabilities not certainties. Now, we know that risk-taking is essential to any success but it’s important to remember the difference between a smart risk and a not-so-smart-risk. Understand the market, know the probabilities, and perhaps most importantly, understand the future. Don’t get us wrong, the future is impossible to know. Based on past and present trends, however, it’s possible to make a forecast of the future. That way you can make an investment with both short-term and long-term success. To help you out, here is what to expect in US real estate trends over the next 10 years:
US REAL ESTATE TRENDS #1: IT’S GOING ONLINE
As the world expands, opportunities grow in number, and real estate investing advances, the limitations of your average real estate agent increase. There isn’t much left for the real estate agent to do that you can’t do yourself now. With the virtual revolution of online real estate investing, a great number of platforms have transformed real estate investing into an unprecedented realm of easy-access. Online real estate investing platforms are part of what to expect in US real estate trends over the next 10 years. Take a look at just 3 of them here:
We deliver real estate investment analytics on one platform so that you can make informed investment decisions.
Mashvisor has built interactive property and neighborhood insights that include analysis of Traditional and Airbnb pricing, occupancy rates, seasonality trends, revenue potential, cost assumptions, cash flow calculation, and financial and purchase investment analysis. Our focus is delivering informative real estate analytics so that investors can make informed decisions in their investment. Property and neighborhood investment analysis reports are instantly available in easy-to-read visualizations. Never again analyze investments using spreadsheets.
We analyses and presents the data quickly, reducing a research process that usually takes three months to just 15 minutes. Using the quickly-delivered data, you know exactly the potential income of all traditional and Airbnb properties in the area and maximize returns by finding where are the highest performing neighborhoods. You can instantly edit cost assumptions to fine-tune your analysis on every property profile.
Looking for properties making informed investment decisions can all be done from your laptop.
Matterport has created the option for sellers to capture their properties virtually so potential buyers can see them in high resolution from anywhere in the world.
Typically, buying real estate sight-unseen is considered too risky for most buyers to consider. Now, with high-resolution, interactive 3-D virtual reality, buyers will feel like they’re walking through the property in person. The virtual property tours are not fixed either—they’re mapped to show interested buyers the the natural light at different times of day and even different times of the year. Virtual reality software will let them superimpose various pieces of furniture in the space.
Prospective buyers will be able to virtually walk through dozens of homes in an afternoon from the comfort of their own laptop, with these virtual tours available through their online broker. Virtual reality makes it much easier to confidently buy property anywhere in the United States or even anywhere in the world.
Setting a rental rate can be a difficult decision for property owners to make. Based on the property value, updates, and neighborhood, a landlord or property manager guesses what the market rent is and advertises it. But a given rental unit may be worth $900 to one person and $1,100 to another who would happily pay more to live two blocks from their work.
HouseME has launched a rental listing and management service that gives landlords the option to allow potential tenants to bid on the rental rate. The landlord sets a reserve rent, and renters are all pre-screened when they sign up for the service ensuring a fair and risk-free result.
Less desirable rental units will receive fewer and lower bids while high-demand rental units will generate higher bids. The resulting rent will be the true market rent, rather than a landlord’s hunch or best guess. It also ensures that the renter who moves in is the one most enthusiastic about living there.
This can be done on your own and from your laptop rather than needing to consult a real estate agent about property value of neighborhood averages.
US REAL ESTATE TRENDS #2: INVESTABLE REAL ESTATE WILL EXPAND SUBSTANTIALLY
Population growth is one of the most critical things to expect in US real estate trends over the next 10 years. Shifts in population are predicted to drive and increase in demand for real estate. Rapid population growth and increasingly thriving economies will propel this expansion. By 2020, investable real estate will have grown by more than 55% compared to 2012, according to PwC forecasts, and then will expand by a similar proportion in the following decade.
Just one example of this is Nashville. One of the most important factors driving the real estate market as well as real estate investments in any location is the economy. Nashville’s economy is doing quite well. Indeed, Forbes ranked Nashville 4th among all 421 metropolitan areas in the Best Big Cities for Jobs 2016 ranking, with job growth of 3.4% in 2015. Moreover, Credit Sesame, a personal finance website, identified the top 10 18-hour cities, and Nashville emerged as #5. This means that Nashville offers similar lifestyle and opportunities as the 24-hour cities, like New York and San Francisco, but remains more affordable and even more enjoyable. The 2016 Kauffmann Index ranked Nashville 5th among metro areas for entrepreneurship growth, 4 positions up from 2015, which demonstrates the further potential of Nashville. The Index placed Nashville as the metro area with the highest density of high-growth companies in two industries: business products and services and health.
All this means that Nashville’s economy is stable and growing, which is one of the major forces pulling in people. A strong labor market and a stable industry affect both traditional and Airbnb rental positively. This suggests that real estate investors should be looking at Nashville investment properties and this is the case for cities all across the nation.
US REAL ESTATE TRENDS #3: WIDER RANGE OF RISK AND RETURN
One more thing to look out for in US real estate trends over the next 10 years are a widening range of risk and return. Cities will present opportunities ranging from low risk/low yield real estate opportunities in developed economies to high risk/high reward in emerging economies. This means it’s smart to consider investing in areas that might not be hot spot now but are predicted to be in the next few years.
The greatest social migration of all time to major metropolitan areas is predicted to drive what will be the biggest ever construction surge. With properties being constructed at a faster pace than ever before to accommodate the population surges, now it a time to get in on the investments.