When doing private real estate investing, watching trends and identifying opportunities and risks is an important process to follow. When trends are effectively used, this allows for better opportunity and growth with your investments.
Being able to quickly identify trends and how they affect your investment is an essential step toward a greater return and a more positive investing process.
Data is essential, and knowing how, when, where, and why to use it is key. Technology bridges the gap between analysis and decision-making. With technology, decisions can become more precise and data is handled on a greater and more accurate scale.
There are many emerging trends to watch in real estate and this guide will be discussing some of the most important trends to always keep in mind.
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What is Private Real Estate Investing?
Private real estate investing is usually a pool of funders that invest in real estate for various different properties. These properties can vary in many different ways. From investing in raw land holdings, new building construction, or injecting funds into a struggling property, this form of investment yields a great amount of return.
Previously, this form of investing was designated for more skilled investors, but over the recent years and with the evolution of technology, it has become more widely accessible to newer investors.
Financial services assist investors in receiving information on quality estate assets that would have only been attainable to institutional clients. This bridges the gap for investors new and old to receive the assistance and information that makes a difference.
How Trends affect the Real Estate Industry
Trends are a key determining factor in the success or failure of an investment. When trends are not taken into account, the investor could potentially face a loss or much lower yields in their investments.
When these trends are taken into account and accurately maintained, there is a larger room for growth, opportunity, and investment success. Trends can range and change over the years due to a number of different causes
Over the recent years, there has been a massive change and shift in trends due to a number of key societal factors such as:
- COVID-19
- Inflation
- Lack of Housing
- Climate Change
and a range of other factors. These factors are important to consider because they can drastically alter the private real estate sector for either the good or the bad. When these key trends are identified, an investor is able to accurately determine where the demand lies and where the investment would be best spent.
Emerging Trends to Watch
As mentioned before, monitoring trends is essential to any investment. With the factors that have drastically changed the way our society functions over the last few years, so too has the real estate landscape changed. Here are some of the most important trends to look out for and how they affect your investment.
Cost of Housing and Lack of Housing
Lack of housing has been a great debate and problem over the last few years. With there being more people and families than housing, as well as the price of housing going up substantially, housing is not as easy to come by as it used to be.
The housing crisis can affect an investment greatly because it means fewer people are purchasing and renting property and larger groups of people, such as multi-numbered families, are staying together.
This increase in demand that is not being met means that investing in high-risk areas that do not showcase a good amount of property purchase, could affect the way that your investment grows and functions. Placing your investment in projects such as raw property holdings and project developments is a good means to making your investment work.
The reason this is so effective is that it directly assists with the housing crisis whilst also taking into account the areas that people are moving to. There has been a greater shift toward the southern half of the country over the northeast.
This means that more people, and the younger workforce, are aiming to live within a specific area for specific reasons. Focusing on these areas and real estate placements is an innovative way of getting around a difficult problem.
Climate Change
Climate change is a real and serious topic. Over the recent years, and throughout the recent decades, there has been a massive shift in the way that the climate functions. More and more homeowners are focusing on properties that are sustainable.
This means that there has been a higher need for an estate that showcases sustainability ratings. The aim of this has been to adopt a mindset that lowers actual building emissions to affect real positive change in the industry. This trend showcases that it is a higher risk to invest in property which implies that the building showcases a high emission output.
This emission output is a threat to the property’s value and could require a greater level of focus and funding to bring the building up to standard with climate-related upgrades that are imposed by legislators.
COVID’s Impact on Office Space
There is no doubt that COVID has had a massive impact on a global scale. With more people working from home and less needing to commute to the office, this means that there is a lowered need for office spaces.
In some cases, offices have become smaller in size with people and business structures not moving toward a home-orientated feel.There have been various sources that indicate that over half of the workforce now work from home, and less than half are commuting to office spaces.
While there has not been too much development on this trend as of yet, it is important to monitor and understand how it works. The main issue that has been brought about by this change is that more firms are not renewing their expiring leases and many others are downsizing.
This could have an impact on the way that the market functions so investors should always be aware of how this may change the real estate investment landscape. The worst-case scenario is that there would be a mass departure from office spaces toward work-from-home options.
Preparing and adapting to these factors is an innovative and essential means to using trends effectively for your investment.
Inflation
Inflation has gone up. This is mostly due to COVID’s crippling effects on the global market. Inflation is a massive trend to monitor because of its impact on every facet of the real estate market. Inflation affects real estate from the ground up
Materials are more expensive which means that project developments may take longer. Property is more expensive which affects the purchasing of new properties. With the rise of inflation and the dilemma of the housing crisis, this now means that property costs far too much, for far too many people.
This trend can drastically affect the real estate market because fewer estate assets are being purchased and the development of newer buildings is taking longer. Monitoring the need for housing and the effects of inflation is a key trend for any private real estate investor because inflation could have many different side effects and consequences for your private real estate investment.
How Technology Can Help
Technology has been quickly adapting to the many needs that we as humans have. Technology has swiftly become a solution-making machine that allows investors to accurately track trends and forecast possibilities.
There are many benefits to using technology in investment.
Identifying Trends
As we can see, trends are an important lifeline to any investment plan. Without taking these trends into account, an investment could suffer in many different unforeseen ways. Through utilizing artificial intelligence and automation, technology is able to swiftly identify and highlight key trends that are present in the industry.
This allows investors to more accurately make decisions based on the data that is present.
Processing Big Data
There is a lot of data that comes with analyzing the market. In a traditional sense, a lot of this data goes unused and unseen. This could leave potential risks and benefits out of sight. Technology has the capability to process data at phenomenal speeds. When this data is completely processed, there are many positive changes that can be made toward a better investment plan.
Technology is able to identify and forecast trends, and showcase risks and benefits, as well as a myriad of other needed decision-making factors. Using this data is a great tool for newer, as well as experienced investors.
Investing in the Right Fund
Finding the right fund that suits your investment needs is important. Transparency and data are essential tools for success. Having these tools in the palm of your hand is a definitive way of seeing success in your returns.
Our company is a fund that supplies its investors with the tools and information necessary to find accurate data and quality estate assets. Partnering with an innovative fund means that you receive all the data and information needed to find success in your investment endeavors.
Start private real estate investing the right way, email us at info@saintinvestment.com or contact us at 949-881-7128 at Saint Investment today!
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President of Saint Investment Group
Nic is a two decade seasoned expert in investing and capital raising, specializing in Real Estate and debt markets. With Saint Investment Group, he leads large-scale distressed asset purchases and innovative syndications for investors.
