The real estate market today is facing its fair share of issues. Rising interest rates combined with an unprecedented inventory shortage mean it’s not easy to get a good deal on a home, and even harder to make a return as an investor. That doesn’t mean that there aren’t any opportunities to be had though. Savvy investors are finding ways to navigate the market, and even use current market trends to their advantage. In this post, we cover some ways that you can still make a great return with real estate investing, and the opportunities available to you in today’s market.
Home flipping is one of the most popular forms of real estate investing, and it continues to be a viable strategy in times of economic downturn. Higher interest rates mean it may not be a great time to invest in long-term rental properties, but flipping remains profitable because it’s less reliant on interest rates. Your return will mainly lie in the renovations you perform and how much value you can add to a property. The key to a successful flip is finding a lower-priced home in a great neighborhood. From there, it should be easy to add enough value to the home to have it rise and match the values of surrounding properties.
There are a good number of opportunities available if you’re willing to look in the right places. And one of those places can be the foreclosed and REO (real-estate owned) market. If you’re unfamiliar with REO properties, these are homes that have been foreclosed on and are currently in the possession of a real estate lender. Some other options to consider include auction and off-market properties. You can leverage your network to get in touch with sellers and work out a deal before their homes even hit the open market. The first step to a profitable deal is getting a property for a good price, and purchasing a home through one of these avenues can be the perfect way to do just that.
Although mortgage activity is slowing down, many analysts believe prices will continue to rise due to the inventory shortage. As an investor, you can benefit from this appreciation by simply buying and holding real estate property. The assets that will perform the best during this time will be multifamily homes, as both rents and property values are set to grow. If seasonality remains a factor in the real estate market, that will make the upcoming winter months the best time to acquire a home at a fair price.
Low inventory means new construction can be a very profitable investment, and especially if you build in an underserved market in need of homes. Another great idea is to build in or near an up-and-coming city so that you can benefit from high demand. Some examples of rapidly growing cities include Austin, Nashville, Tampa, and Charlotte.
It pays to have a team of trusted professionals you can turn to when you’re investing in a competitive market. A good real estate agent can find you the best deals before anyone else sees them, and they will prove to be an essential part of your business strategy. And a good lender will be able to get you funding quickly, so that you can move on a great deal before it’s too late. Having a solid team of real estate professionals can be the key difference that puts you ahead of pack.
One more way you can get ahead of the competition is by utilizing the data available to you on real estate markets. You can use analytics on your local market to determine which neighborhoods people are moving to, and where an investment is likely to gain value. You can also use data aggregators such as ATTOM Data to observe macroeconomic trends and help determine if now is the right time to buy.
APR Mortgage lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors. If you are an investor looking to finance a property, APR Mortgage has competitive loan options available. Connect with us today to discuss your next real estate investment.