The real estate market is anything but predictable. One need look no further than the last couple of years of pandemic-induced turmoil, limited properties, and skyrocketing home prices for proof.
This instability can be unnerving at times. However, it also guarantees a consistent stream of opportunities that real estate professionals and investors can use to their advantage. If you're in the real estate world, here are four key windows of opportunity that you want to have on your radar.
1. Tech Is Taking Over
Every area of the market is being impacted by technology, including real estate. As millennials have entered the housing market in larger numbers, they've brought a new wave of technological expectations with them.
Mobile devices are playing a more crucial role in the buying process. Property listing platforms are evolving at breakneck speeds. Drones are being used to offer virtual tours. Everywhere you look, change is taking place.
Even mundane aspects of market interactions are becoming more streamlined and accessible. For instance, Mortgage Automator has been making great strides in the area of automated lending processes. The software helps lenders improve customer service and accessibility for their clients. At the same time, it reduces the workload for the lenders by improving efficiency, security, and cost-effectiveness.
Whether it's computerized lending, drone-driven home tours, or pushing properties right onto consumers' smartphones, tech is revolutionizing real estate. As the path to the future, agents and investors must be ready to steer into technology now. Investing in the latest tech trends can help you remain at the forefront of the real estate industry - where the best opportunities can often be found.
2. Following Forbearances to Foreclosure Can Pay Out
If you're looking for a way to get your foot in the real estate world without a ton of cash, you can always look for a foreclosure. Picking up a property in an auction has always been a great way to begin investing.
If you're looking for specific windows of opportunity, the upcoming summer season may be a great time to look for a foreclosure. Many experts are predicting a wave of foreclosures as the pandemic recedes and forbearance measures for many begin to disappear.
To be fair, the pandemic relief efforts have mitigated the potential number of property owners who would have slid into default due to the pandemic. However, the scenario is still unique. There is a good chance that many buying opportunities will open up in the months ahead.
Even if you're not operating out of a pandemic, though, there are others windows of foreclosure-related opportunity that should continue to remain open going forward. For instance, getting into wholesale real estate is a great way to generate cash with minimal risk.
In the case of a wholesaler, you contract with a seller to sell their property for a certain amount. From there, you have a set amount of time to find a buyer that will pay a higher amount for the property. If you succeed, you pocket the difference.
Wholesale real estate is a great opportunity, especially for those with minimal capital to work with. Looking for post-pandemic foreclosures is another area that is worth monitoring. If you're interested in a steady stream of cash, AirBnB and rentals, in general, are still a hot area to invest in.
3. Utilizing Data Has Become Key
Data analysis can guide real estate agents and investors alike through the complexities of the modern, interconnected marketplace. Not only does it enable the compilation and analysis of past data to perfect a reaction to current market conditions.
Technology and data analysis is becoming sophisticated enough to help predict market trends and potential consumer behavior, as well. For instance, an agent can follow various factors for individuals and businesses alike, such as:
The equity a homeowner has in their home;
The consistency of a homeowner's mortgage payments;
How long an owner has lived in their home and the age of their residence.
A company's income levels;
A business's employee growth or decline.
Factors like these can be analyzed and used to accurately guess future events. It can help agents estimate when a homeowner may want to sell their home or a business might be prepping for a move.
This is just one example. Data can streamline operations for agents and agencies in countless different areas of their business processes. It also helps investors see if they're getting the biggest return possible on their investments.
As with most industries, the use of data analysis in the real estate world is both diverse and comprehensive. It isn't just an open window of opportunity, either. Much like other technological solutions, it is the way of the future.
4. Rentals Are on the Rise
Rentals have always been lucrative. But the trend toward rentals has only gained steam as the 21st century has unfolded. As recently as 2017, Pew Research reported that a whopping 36.6% of U.S. households rented. This is the highest percentage since 1965 when rentals made up 37% of the market.
A large portion of this trend was defined by the millennial generation. For years, the demographic has shown remarkable resistance to traditional mid-life activities, including getting married, starting a family, and buying a home.
Between the Great Recession and now the coronavirus pandemic, it's not surprising that the generation would be reluctant to dive into heady financial activities like these too soon. Millennials have finally begun to find some homebuying traction in the last couple of years. And yet, they're being followed by Generation Z. This younger group has lived through much of the same economic unrest, and is already showing a similar proclivity to renting.
This tendency toward rentals has kept the rental market both wide open and lucrative. The combination of equity and income remains an open opportunity for anyone looking to play the long game.
Regardless of the area of opportunity that you focus on, though, capitalizing on the latest tech should always be at the front of the list. This gives you a cutting-edge advantage in your real estate activity. It also helps you stay ready to act on any future windows of opportunity when they open up.