The real estate market has always been somewhat volatile, and the coronavirus pandemic has added to this. Investment strategies may come and go as opportunities dry up quickly. This is the nature of the real estate beast, and making a success of being an investor means knowing how to identify opportunities using forethought and strategic analysis and having the flexibility to act on them immediately.
With a robust economic recovery expected in 2022, here are the top three real estate investment opportunities to consider this year:
Land investment
Real estate investments are not limited to land occupied by buildings and other structures. Although vacant land investment is not a priority for many real estate moguls, many experts think otherwise. Investing in land would be a wise choice given the benefits you get, including affordability, future stability, and limitless possibilities. In contrast to other real estate opportunities, the land is comparably affordable and it is explained by its low demand and the vacantness which, by the way, means that you won’t have to deal with competitors. Moreover, there are no structures on the ground, no houses or factories, but actually, it’s another benefit of investing in them. There’s nothing to worry about because it will always be where you left it. Besides, that gives freedom to the imagination and so many options to make the best out of it.
Once you own land, it is yours to decide what to do with it, within reason, of course. Before purchasing a piece of land, ensure that you know how regulatory bodies have zoned it so you do not put it to improper use. It is doubtful that you will be allowed to construct a high-rise apartment building on a piece of rural land. Land investment is typically a long-term commitment for both businesses and individuals and requires patience if you are to prove a profit.
While determining your final goal with a land investment, rent it out to farmers or hunters, so you make an income from it. If you make a strategic purchase, your land may soon be in demand for a city’s expansion, and developers will pay top dollar for it.
Land investment or multi-family rental investment opportunities are is a substantial commitment and should not be entered into lightly. Should you be considering this profitable possibility, work with a trusted real estate agent, research everything regarding the sale, and put your money to work for you.
Repurposing existing buildings and structures
Disused retail, accommodation, and office spaces stand empty, sometimes for years at a time. Many investors are looking at them as prime opportunities to turn a handsome profit. Such properties need to be viewed in an innovative light to find creative ways to adaptively reuse them without too much construction and alteration.
Retail stores and malls, hotels, and office buildings were hard-hit by COVID-19. As businesses closed their doors, more vacant spaces began to accumulate until entire buildings were unoccupied. Recent efforts at reopening some business operations disrupted by the pandemic have seen such areas being revived. However, their occupancy rates are unlikely to return to pre-pandemic levels anytime soon.
Investors are eyeing these real estate businesses with current and future demand in mind, looking for alternative ways to make them profitable. A prime example is buying a disused hotel in a city center and repurposing it to create low-cost housing. Demand for low-cost housing is at an all-time high as many individuals continue to face unemployment and must wait for the economy to recover before their odds of finding a job improve.
Industrial real estate is also a lucrative investment opportunity. Many industrial buildings are vacant, and buyers are snapping them up for conversion into distribution hubs or data centers.
Rental properties
Many landlords are feeling cornered by the current real estate market. After the government put eviction moratoriums in place to protect vulnerable families whose income dried up when COVID-19 hit, landlords were faced with zero monthly rental income while still paying property taxes, performing routine maintenance, undertaking repairs, and keeping insurance premiums up to date. This was further compounded by these rental property owners having to pay their mortgages on time.
While there is an increased demand for rental properties in some areas, others are showing a decline. People are moving away from expensive city center accommodations to quieter, less costly locations, especially as some will continue working from home and no longer commute to an office.
With so many financial challenges facing them, many landlords are eager to offload their rental properties, with some doing so at reduced prices so they can get out from under their debts and break even. While similar problems might dog new owners as existing ones, those with sufficient capital and patience to ride out the current storm will soon turn a profit.
Rental moratoriums may have been put in place to stave off the displacement of tenants during COVID-19, but people with home mortgages have not been as lucky. Indeed, no federal law forbidding foreclosure under a moratorium seems forthcoming. Many homeowners are facing a financial crisis as their mortgages remain unpaid.
Experts predict a foreclosure wave will sweep across American cities. Investors looking to buy rental homes will find this situation advantageous as it allows them to pick up homes cheaply and rent them out while turning a substantial profit.
