While the real estate market is often regarded as one of the most consistent and lucrative investment sectorsin the U.S., it is still susceptible to periodic fluctuations. That certainly proved to be the case over the course of the COVID-19 pandemic, which fundamentally altered housing inventories and home values on a national scale. Still, the market may be changing yet again in the not-too-distant future, making it essential for investorsinvolved in the sector to keep close tabs on emergent trends.
To help forecast this dynamic climate we currently find ourselves in, the experts at JCAP Private Lending shared the following insights on the real estate market and what trends they expect to impact the industry. Check out their advice so you can start preparing for these upcoming changes now.
The practice of trading fractional shares of individual real estate assets is expected to continue growing, making it more accessible than ever for real estate investors to participate in both residential and commercial commodities. There is a plethora of new FinTech companies actively lowering the barrier to entry for investors of all experience levels and budgets to remotely invest in a wide variety of properties across the country.
Zoning & Permitting Nuances
Comprehending the ins and outs of local zoning and permitting protocol at the municipal level will be more important than ever in the coming years. Planning and zoning authorities play a significant role in the investment planning process as they essentially have the final say as to where real estate property can be built and how they can ultimately be used. Investors should be proactive and contact local planning offices directly to avoid confusion and make complying with any pertinent regulations that much easier.
Rebirth of Secondary Markets
COVID-19 prompted notable population shifts into the secondary and tertiary markets, making it readily apparent to investors that these now in-demand locations require a major facelift when it comes to updating their commercial districts, rebuilding run-down communities and implementing supportive assets to meet the uptick in buyer demand. Investors who do their research and get their feet in the door in these up-and-coming areas will be able to maximize their return on investment, so pay close attention to economic and demographic trends as they start to become apparent.
Increased Virtual Showings
According to data from the National Association of Realtors, millennials comprise approximately 40% of all potential homebuyers in the country as of 2020. The majority of these customers conducted property tours online and 90% of them reported that the quality of the images showcasing the properties was the determinant factor in which ones they chose to visit in-person and ultimately buy. Investors should focus on investing in premium quality photography as well as virtual and 3-D videos of the home and surrounding neighborhood to give buyers a true sense of what the property has to offer.
There will likely be a significant uptick in the nationwide implementation of mixed-used zoning. Taking an adaptive approach like repurposing former hotel buildings into multifamily rental units or transforming parking areas into self-storage will be an increasingly common strategy. These repositioned and modified preexisting real estate assets will be a sizeable value-add when it comes to revitalizing communities and creating new investment options for investors seeking to diversify their portfolios.
Funding for the Future
As much as the real estate industry is changing, there is one thing that will always be constant: the need for fast and efficient funding. The experts at Jcap Private Lending understand the unique challenges and dynamic nature associated with real estate investing and pride themselves in crafting creative and effective financial solutions that are individually tailored to fit your specific needs and objectives. Contact Jcap Private Lendingtoday to learn more about how we can help you get started on building your investment property portfolio.