Even with the availability of vaccines, the COVID-19 pandemic is far from over. But this isn’t stopping Americans from pushing the real estate industry forward. Residential real estate, in particular, is predicted to flourish throughout 2021 regardless of the shaky global economy brought about by the pandemic.
Real estate industry experts predict that more Americans will buy homes to fit their new lifestyle. This could mean buying residential real estate with a home office for people who transitioned to remote work or with an indoor gym for people who are dedicated to fitness, to name a few examples. ;
The Millennial generation is also starting to look into the possibility of owning their first home.
Annual sales in the housing market are expected to rise from 5% in 2020 to at least 10% this year. For this reason, you might want to consider investing in real estate.
Why invest in residential real estate?
There are many types of real estate for you to invest in. You may opt for vacant, retail, commercial, or industrial properties. But today’s focus is on residential real estate.
The pandemic showed Americans that their home can transform into a school, office, gym, entertainment center, and many other types of properties depending on how much space and privacy they have. Add the fact that more people are moving out of major cities and into suburban towns because of the increasing normalization of remote work. It makes sense why residential real estate is looking positive.
Homebuyers don’t even need to attend open houses anymore because virtual house tours are increasingly popular. They can easily explore their potential house from the comfort of their current home.
Consider these practical reasons for investing in residential real estate this 2021:
- More people are realizing that their house can be more than a place to rest and retreat after long days at work. It’s better to invest in real estate before the housing inventory declines and the demand increases. You’ll get better deals. And you can sell it in the future for a higher price.
- Throughout 2020, mortgage rates keep hitting a record low. This makes it easier for first-time homebuyers to afford residential real estate. It also helps current homeowners refinance their property. But home prices are expected to rise. So, act quickly before these prices skyrocket.
- Layoffs and pay cuts are still a possibility while businesses try to get back on their feet. By investing in residential real estate today, you can eventually sell it when the price appreciates. Alternatively, you can transform your investment into a rental property, and earn passive income.
How can you maximize your real estate investment?
There’s more to residential real estate investment than choosing a property you can afford. You have to consider all possible investment options so you can maximize your earning potential. The right investment could lead to a stable cash flow, high passive income, asset diversification, and tax advantages.
Take a look at your residential real estate investment options.
- Remodel and sell residential real estate. If the obligations of a landlord don’t appeal to you and rental property investment isn’t the right path for you, you might want to consider flipping property and selling it at a higher market price. This means fixing the lawn, applying home automation, customizing window treatments, and upgrading other aspects to increase property value.
- Gain passive income from rental property. This might seem like a high risk for many people because of the high initial investment. You’ll also need to set up the property and take care of maintenance before you start seeing returns from the rental income. You can earn more from a rental property if you invest in one that’s easily accessible and that has great amenities.
- Let the property value appreciate before selling it. Not many people are interested in this option. But if you have the resources to spare, it would be wise to conduct market research and wait for industry forecasts before selling your residential real estate investment. You won’t get immediate liquidity but with the help of the right agent, you’ll be generating maximum gains.
You have multiple real estate investments to choose from. Rental property lets you start earning passive income as soon as tenants move into your property. Remodeled real estate typically takes 6 to 12 months on the market before you secure a deal. And the third option can be much longer than that. Your choice depends on how much resources you can shell out and what type of income you want to generate from it.
