Updated: Jan 24, 2019
This year will be an interesting one, with a changing market, new technology emerging and shifting demographics. If you are smart and pay attention to the changes and innovations, this could be your most profitable investing year yet.
Let’s take a look at some of the hottest trends that are shaping the real estate investment landscape in 2019.
Buying Properties in Second Cities
Many people are moving away from the large, expensive capital cities and choosing to live in smaller, “second cities.” Not only are small and medium-sized cities more affordable than their larger counterparts - but they also have their own emerging cultural, culinary and artistic scenes.
These types of cities are especially popular among millennials. For example, between 2010 and 2015 cities such as Colorado Springs saw their population of millennials grow by more than 10 percent.
Cities such as Indianapolis, Indiana, and Madison, Wisconsin have grown due to thriving tech scenes and headquarters for large companies. Plus, the increase in remote work means that many millennials can work from anywhere - so why not live somewhere with a friendly community and a welcoming atmosphere?
With the increased interest from millennial buyers, properties in these types of vibrant, small to medium-sized cities will make a highly valuable investment this year. (They are also becoming emerging tourist destinations, making them a great option for vacation rental investment too.)
Using Modern Property Technology
In recent years, an influx of real estate technology companies has offered new ways for investors to use big data. For example, there are “iBuyers” such as OfferPad and OpenDoor that allow sellers to get an offer on their property within 24 hours. (The price is determined by an algorithm.) It’s a convenient option for those who want to move as soon as possible and don’t want to go through the lengthy hassle of traditional home-selling.
Another interesting startup is Bungalo, which will buy, renovate and sell single-family homes to owner-occupants via an online platform. The twist is that rather going to the highest bidder, the property will sell at the list price to the first bidder who is pre-qualified. This removes the time-consuming uncertainty of bidding wars from the real estate transaction. The list price is set with data and technology - and it’s often close to what the house would sell for on the open market anyway.
There are also many other startups offering technology solutions to some of the main pain-points of buying and selling homes. Check them out and see if any of these solutions will benefit your investment plans in 2019.
Investing in Apartments with Luxury Amenities
The modern apartment building offers much more than living space these days. Many of the new high-rise buildings in the hippest cities have everything from state-of-the-art gyms to movie theaters to dog runs to co-working spaces. Some might even have spas, pools, saunas and beauty parlors.
They might even offer services to residents, such as laundry service, valet parking and more. Plus, many of the most modern apartments are now outfitted with smart home devices that allow residents to change the thermostats, turn on lights, play music and more with the touch of a button or a voice command.
It’s all due to apartment complex owners trying to one-up each other with new selling points to attract downtown renters. If your goal for 2019 is to invest in an urban apartment, make sure that the amenities are just as enticing to renters or tourists as the apartment itself.
Flipping Starter Homes
At the moment the real estate market is stabilizing and many buyers who already own property are looking to move up. Meanwhile, first-time homeowners have access to lower down payments and better financing, which makes it easier for them to buy their first property.
Buying and flipping a starter home can be a great real estate investment opportunity. Look for a house that is in a desirable location for first-time buyers and is close to schools, parks, and shopping. You can choose a house that has good bones but needs a bit of a cosmetic uplift, then give it a makeover.
When you factor in the increase in home value compared to the cost of the renovations, you can make a significant profit.
Investing in Vacation Rental Fractional Ownership
There’s a very clever way to invest in a vacation rental without having to own the entire home yourself. Fractional ownership allows you to share the costs with other people who want to use the home.
Fractional ownership in a vacation rental property means that you can own a share of a vacation home, rather than the entire property. This option offers lower acquisition costs, lower operating costs and better diversification of your investment. Also, the rentals will be handled by a property management company, so it’s much less hassle.
Because you’re splitting the cost with others, you may be able to buy a bigger house than you otherwise would. Plus, you’ll also be able to use it yourself for a few weeks out of the year when you go on your vacation. For example, you could invest in a beautiful beachfront villa in the Caribbean where you can escape when you need a break.
What are your investment goals for 2019?
If you’re interested in fractional ownership of a vacation rental property, Partbnb offers you a golden opportunity. Our expert team hand-picks properties in the Caribbean based on what will deliver the best yields. We will take care of renovations, listing the property on vacation rental websites and managing rentals. All you have to do is watch your income accumulate every month.