Investing in a business or real estate isn’t an easy step, especially if you are new to the whole charade. It’s hard to predict the high and low of the real estate market, which is why investing in real estate isn’t for all. If you are looking to invest in the real estate market, here are a few key factors to consider. Don’t go in blind, have a quick read through these to understand how the real estate market works.
1. Interest Rates
One of the most important factors of investing in real estate is the interest rate. The decisions to buy or wait can heavily rely on these rates. The fact that you can’t predict these rates is inevitable but keeping a close eye on the market will aid you in picking the best rate time. Higher interest rates mean fewer buyers, which is a bad outcome for investors. For 2019, the average mortgage rate is around 5%, and as far as the market goes, it will stay closer to this for a while.
Although block-chain hasn’t taken over the real estate market yet, there are some areas where it's effectively implemented. With the bock chain, the investors can pay comparatively less mortgage, get solid documentation, and verify titles with ease. Though many people link block-chain with crypto-currency as it was created as a secure receipt system, it’s more like an efficient record-keeping system in the real estate market.
3. Smart Home Technology
With technology taking hold everywhere, the real estate market is no different. Landlords everywhere are obliged to invest in high-tech luxuries before renting out any property. These may include but aren’t limited to smart thermostats, safer fire suppression systems, efficient energy-saving appliance, and sound security systems.
The latest tech-prone properties, renters are getting more and more aware of this recent shift. It won’t be long before these will be on the list of every renters’ “to search apartment requirements.”
4. Millennial Renting Inclinations
Trends in every area of life tend to change with every new set of generations; the real estate market is the same. The millennial generation (23 and 38-year old) has its own idea about acquiring their homes. Their approach is drastically different than the previous generations.
They are more into renting than buying their new homes. Due to this, the city areas that are close to the commercial sectors are experiencing a boom in investment. They want work and entertainment all in one place, so there is also a huge demand for cafes, shopping centers as well as clubs in the close-knit neighborhood as well.
Who can argue with the fact that renting is way cheaper and affordable than buying? Most of the American community can’t afford a new house as its way above their pay grade. It will take a lot of saving on their part to afford their first property.
This takes us back to renting, since buying is out of the question, renting the community looks to rent the same house for the long term. So, for now, the landlords are focusing on keeping their community family-friendly to attract better renters.
Many of these factors are constant like the interest rates, affordability as well as the preferences of new generations. These have always had a huge impact on the real estate market. They may be known by all landlords, but understanding their importance is what a landlord should consider. Adding these trends to your investment strategies will help you a lot when taking a big step.