Emerging Trends and Future Outlook in Passive Real Estate Investing

emerging trends and future outlook in passive real estate investing

Many new investors feel a strong sense of hesitation when they look at how to start their first passive real estate investing. Particularly now that we are entering a new year when the economic and real estate markets are showing signs of uncertainty and optimism.

When it comes to investing in real estate, there is no best or worst time to do so. Therefore, if you have been waiting to buy a real estate property, you should be aware that there is no perfect time. Wherever you live or where you plan to invest, there is always an opportunity in real estate to learn how to make money.

If you are interested in generating passive income rather than being a landlord, passive real estate investing can be an excellent investment opportunity. 

The passive investment property approach is by its nature a hands-off financial strategy. Either online platforms or mutual funds can be an ideal solution for busy real estate investors who are looking for passive real estate investments.

The amount of borrowing costs and uninvested capital targeting commercial real estate investment is at an all-time high. It is becoming increasingly common for real estate investors to focus on debt strategies, economic growth, value-added investments, and opportunistic investments.

Real estate market conditions are changing, so they are looking for opportunities across real estate asset classes.

Passive Real Estate Investment Trends and Outlooks

You might wonder how long the real estate industry will remain on a rising trajectory if you are looking to invest in commercial space or investment property.

Here are some current trends and future outlooks to keep your eye on when investing in passive real estate, if you’re interested in starting or continuing a real estate investment.

Home-Based Vs. Office-Based Work

The number of workers going back to work has not returned to where it was before the pandemic. The majority of workers in major markets don’t actually go into an office on a given day, according to various sources. Leading tech companies and investment banks, for instance, have issued ultimatums to resume operations.

Employer demands have so far had little effect on in-office work that it is unclear whether they will translate into more. Commutes to the office are a thing of the past today for most people. The real estate industry is feeling the effects of this sentiment.

Approximately 10% to 20% of the office real estate stock should be converted or removed, according to industry sources. It will be crucial for landlords to deliver what tenants want in the remaining office space.

Some businesses will hold on to their offices as a precaution or because they couldn’t break their lease if they need the space in the future. Most businesses, though, are downsizing or not renewing their leases as they expire. Because of this, vacancy rates in the residential real estate sector continue to rise slowly. The majority of tenants are subletting their office space until the end of their leases.

Workers in the future will need a lot of office space, but no one knows exactly how much yet. However, even under the most pessimistic scenarios, office buildings will not experience mass departures.

Innovative Parking Solutions

Parking spaces are one of the fastest-growing industries in major cities, even though some may not consider them real estate investments. In addition to being in high demand and lucrative, privately owned parking spaces are enticing to entrepreneurs.

As a result, and similar to real estate, parking owners and people searching for parking spots can connect via online marketplaces and applications. Parking spaces are certainly a good investment if you plan on real estate investing in 2023 and have a limited budget.

Passive Real Estate Investing Tools Online

There are online platforms that allow investors to manage their investments today. Real estate projects can be browsed by institutional investors on Realty Shares, a platform where experts curate various projects. Companies manage investments and loans, with you choosing between equity or real estate.

You can invest in crowdfunded properties like these without spending time actively analyzing properties and handling all the associated paperwork with passive investment property tools.

It is important to log into the online platform regularly to check for updates when making this type of investment. Keeping an eye on your return on investment (ROI) over time, and updating your numbers quarterly, will help you ensure it is hitting expected targets.

Traditional investment tools may be more suitable if your returns don’t match up.

Digital Solutions for House Hunting

Print media or commercial physical offices were the previous means of listing and selling houses before the digital revolution. It would be difficult to attract buyers to your investment property if you were not visible to them.

The days of this are over, however, thanks to today’s technology. Using PropTech has facilitated the process of listing a house and finding the perfect one, and this is just the beginning.

With more attention-grabbing technologies being integrated into digital hunting, you can expect it to improve even further by 2023.

Technology such as 3D tours, virtual staging, and animated home living videos can be incorporated into these methods. In the years to come, online listing websites will only become more popular.

Get Passive Income from Airbnb

It is very easy to manage an Airbnb listing and communicate with renters via the Airbnb app. It’s also possible to let guests open your home without being present if you use systems like a lockbox or keypad. In order to prepare the unit for your next guest, you only need to pay a cleaning company or property manager after they leave.

Airbnbs are managed this way by people who live thousands of miles away from places such as Arizona, California, San Francisco, and Florida. Since serious property damage or problems cannot be fixed remotely, this type of passive real estate investment is riskier. In some cases, this potential risk is not as significant if you have a schedule that allows you to hop on a last-minute flight without fuss.

You must also consider Airbnb host fees, taxes, and cleaning/management fees when calculating your profits. You might earn less if you don’t get enough bookings per month than if you rented long-term. Some Airbnb hosts buy in busy markets instead of remote locations because they charge a premium in touristy areas.

Rents Will Keep Going Up

There has been a steady increase in rent over the last few years, and that trend does not appear to be slowing down anytime soon. Within the first half of 2023, rental rates are expected to reach historically high levels, according to experts.

Property prices are so high that renting has become the only feasible option for many because they are unaffordable.

A significant proportion of these workers are returning to the workforce after COVID-19 and face prohibitive home ownership costs in large cities. Institutional investors who hope to maximize their returns in the coming year will benefit from increased demand and high rental rates.

Investing in Real Estate Investment Trusts

It is a good idea to invest in real estate investment trusts (REITs) in 2023 if you want to make money in real estate. Investing in REITs is a good option for novice real estate investors who want to generate passive income without having to worry about managing rental properties.

In this way, beginner investors can own a small portion of an investment property without necessarily purchasing it outright. Investment trusts buy and operate investment properties and then split the profits with institutional investors. Instead of building up a pool of money, trusts build up a fund from institutional investors.

Most REITs trade on online exchanges that are similar to stock markets, and there are various types of REITs that institutional investors can invest in. Buying and selling through brokerage firms is easier and less risky for novice investors, however, you should invest in publicly traded trusts.

How Does the Real Estate Market Look in the Future?

A thorough study should be done before investing in the real estate market, regardless if you are starting your first investment or expanding your portfolio.

Due to the number of aspects to consider, the upcoming real estate market trend for economic growth will be challenging. We should keep an eye out for anything that might happen along the way, so we should take note of the above real estate market trends.

From securing profitable properties to selecting the right team members, our real estate investing company can guide you through the entire process.Diversifying a portfolio with passive real estate investments is possible by working with our team of investing professionals. To find out more, email us at info@saintinvestment.com or call us at 949-881-7128 at Saint Investment Group today!