Real estate investment has always been profitable. However, the 2009 mortgage crisis resulted in banks recovering foreclosed properties and auctioning them to get back their investments. This resulted in several million properties being dumped into the ‘For Sale’ market and a crash in real estate prices.
That was then; the real estate market of 2015 is different says Jeff Adams. Local economy has improved, jobs are increasing, and buyers have started investing in commercial and residential real estate. However, for the first-time buyer, this is a confusing time. Year 2015 has just started and it’s difficult to judge just how the market will do. If you are planning to invest in real estate in 2015, there are some major differences you should know about.
Real Estate Products
Apart from residential and commercial property, real estate investors can now choose from a range of alternative property types and real estate investments types that are slowly picking up in popularity. REITs in particular are a very popular form of real estate investment for those people who don’t want to be landlords. For example, farmland and timberland has always been a lucrative investment and there are several REITs in this sector. Other profitable REITs emerging in this market include infrastructure, cloud data centres, single-family homes, medical office buildings, senior housing, billboards, self storage units and student housing. You can always pick up REITs in these sectors as a form of real estate investment.
Competition Decreases
A) Foreign and local real estate investors snapped up large property tracts in 2010 t0 2013. As a result, property inventory has declined dramatically. However, real estate professionals have stated that foreclosed properties and short sales will continue into late 2015. This is because most of the economic measures implemented by the Us Government in 2010 will terminate in early 2015. More than 1.5 foreclosed million properties will be available for sale and new construction will also increase existing inventory.
B) Mortgage rates are still at an all-time low. Financing companies have also reduced upfront payments and this makes it easier for small investors to find properties to buy. First-time buyers in particular have a huge variety to choose from.
C) Foreign investors may be prevented by buying properties in the US by their own countries. For example, Britain is contemplating a mansion tax in which properties over a certain financial value will be taxed. Similarly, China will also be taxing foreign investment to prevent investors from going out of the country. These factors will open up the market for small local investors and first-time house buyers.
Real estate pundits like Jeff Adams #1 Real Estate Trainer caution new investors to learn as much as possible before spending their hard-earned money. The 2015 real estate market is good and you can make a profit. However, it is necessary to learn as much as possible about current real estate investments trends. Attend a real estate investments class, talk to industry professionals, join online forms, and do as much research as possible to understand current trends. Knowledge is power and with the right information, you can easily make a profitable career in real estate investments.
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