Last Updated on March 2, 2024 by Asfa Rasheed
Did you know that the number of homes sold has increased to 20.6 percent compared to the last year? With inventory low, the market is hot for sellers, but is it a good time to jump in as an investor?
You’ll find that the answer depends on whether you’re able to take advantage of the real estate opportunities that have opened up due to the pandemic.
For instance, with people working from home more, there is more of a desire for spacious suburban communities. Similarly, an interest in outdoor dining has increased and safe community areas.
With this in mind, read on to learn about the best real estate investments in 2021!
Table of Contents
Adaptive Reuse
If you haven’t heard the term before, adaptive reuse is the process of purchasing an old building that was used for one purpose and adapting it for a new use. This often happens in urban areas, as space is scarce for the construction of new buildings.
For real estate in 2021, the largest advantage to investing in these buildings is their location. Typically, these buildings will have great locations in popular areas.
One of the caveats of these buildings is that code enforcement can be a huge hurdle to overcome. They also may need to be updated or even replaced electrical and plumbing.
However, you may be rewarded with a historical building with a unique facade and details that they no longer construct today. You may also be able to take advantage of local stipends and the stimulus that the city gives you when you decide to refurbish a historical building.
Residential Properties
As people continue to work from home, suburban areas with plenty of space are starting to look more appealing than crowded urban areas. For this reason, investing in residential properties with sprawling backyards and frontwards can be a wise choice.
However, it’s important to keep in mind whether you want to choose to flip and sell the property or rent it out. If you’ve never rented out a building, you may need the help of a property management company that can increase your costs over time.
Vacation Real Estate
Vacation real estate can be a smart investment even during the pandemic. The reason for this is because people are still interested in spending time with family and taking a break from the everyday grind. With this in mind, we recommend researching locations before you take the plunge in investing in real estate.
You’ll also want to consider whether you’re targeting business travelers or leisure travelers. For instance, there could still be an interest in vacation investments in areas that you wouldn’t normally take a vacation.
This is because business travelers may need more comfortable accommodations for a longer stay.
According to CNBC, here are some of the top areas to invest in:
- Killington, Vermont
- Davenport, Florida
- Whittier, North Carolina
- Kissimmee, Florida
- Myrtle Beach, South Carolina
You can also utilize this point chart DVC in order to see the value of popular Florida vacation areas.
Industrial Properties
Industrials properties are an especially solid investment for 2021. This is because these large, sprawling warehouses can be used as storage areas for e-commerce businesses that have become even more popular during quarantines.
Since these e-commerce businesses are growing in scale, they need storage areas in popular cities in order to easily distribute their merchandise.
It’s important to keep in mind that the industrial property you invest in needs to have easy access to major highways for logistics. They also need to be in industrial areas of a city that can tolerate the noise that multiple trucks and cars a day can produce.
Last but not least, there needs to be a healthy demand for the jobs that the warehouse will produce.
Commercial and Retail Properties
Lastly, commercial and retail properties in urban areas may seem like a risk as more people are moving to the suburbs. However, as the price drops, this means it’s a perfect time to buy.
You’ll have to keep in mind that the pandemic and fewer gatherings mean that you may have more of an issue with cash flow and paying off your mortgage. This means that this is only recommended for investors that have a lot of cash saved and are able to cover expenses until the market begins recovering.
However, people still want to get out more in order to spend time with friends and family. Investors can look into more experiential retail, such as large areas for events, entertainment areas, and shopping that’s nearby these areas.
Researching Real Estate Investments in 2021
If you’re interested in investing in properties in 2021, it’s still possible even in this hot market. The trick is to begin researching your options today so that you make smart decisions that won’t cost you money.
However, it’s recommended not to invest in vacant land unless you’re an experienced investor. The reason for this is because the cost of lumber and building materials is still astronomically high, meaning you’ll have to deal with increased costs and a longer construction timeline. Permits and zoning restrictions can also be a complication.
Overall, real estate trends point towards suburban areas where people are moving due to the pandemic. Vacation rentals are still as hot as ever, and a recent boom in e-commerce means that more industrial warehouses and storage areas are needed.
Of course, investors will also need to research the trends in their own cities and local areas in order to make the most informed decision. Keep reading our blog for more tips and strategies!
