Real estate investing is one of the oldest and consistently most lucrative ways to build wealth. In the past two years, the real estate industry has seen significant growth due to increasing property demands, and real estate has become increasingly popular among groups of investors. Of note, house prices have grown quickly, and fewer homes were available for sale, plus rental prices soared. In the fourth quarter of 2022, real estate investors purchased over 18 percent of U.S. houses according to Redfin. 

Why Real Estate Investing is So Popular 

Real estate investing is popular because there is a low barrier to entry for investors, and depending on the type of real estate investment, investors may start to generate cash flow immediately. Long-term real estate investments build equity over time and appreciate in value, thus offering an important hedge against inflation. Investors can reap the benefits of many types of tax deductions including the interest paid on a mortgage, depreciation, property taxes, insurance, repairs and maintenance, plus business-related travel costs. Investors can leverage their capital and manage their risk levels. An additional benefit of real estate investing is the opportunity to diversify an investment portfolio.

10 Expected Trends for Real Estate Investing 

The real estate market continues to evolve so it is important for serious investors to understand these expected trends for real estate investing: 

  1. A return to “primary markets” in the cities. The COVID-19 pandemic facilitated a large-scale housing shift to small towns and suburban cities where people could work from home in lower-cost housing settings. Now that shift is expected to reverse back to cities as more companies now require some portion of working time on-premises. 
  2. Prices will continue to rise but the crazy spikes will end. Significant property demand is projected to continue, thus pushing prices up, but the dramatic increases in residential property prices will subside. 
  3. Rents will continue to rise. With demand pressure on all housing fronts, rents will increase and prices for rental properties will continue to rise. The combination of increasing rental demand and high rental rates offers an attractive combination for maximizing returns for investors in rental properties. 
  4. ROI will continue to be a key focus for investors. Successful investors will continue to pursue markets with the highest growth potential. Of note, multifamily properties are becoming increasingly popular targets for investors. 
  5. A boom in fractional property ownership. With the cost of housing increasing along with interest rates, it is expected that there will be a boom in fractional property ownership. 
  6. Smart parking solutions are on the rise. While not a “typical” investor target, smart parking solutions are becoming popular among real estate investors. Smart parking addresses the need for more parking as growth takes place in big cities. 
  7. Potential shrink in individual investors. Large corporations and hedge funds are buying more real estate. That offers the opportunity for individual investors to put their money in real estate investment trusts (REITs), thus getting a return on their investment without the challenges of property management. 
  8. Surge in property technology. New technology will change how investors buy and sell properties and even change how properties can be utilized. Additionally, it is expected that the use of digital property-hunting solutions will continue to grow. 
  9. Sustainability. Sustainability is becoming a more important factor in the real estate market, both for environmental and financial reasons. First, is green building, including solar panels and smart home technology. The second is more energy-efficient homes. 
  10. Alternate financing. Investor interest in utilizing alternative financing will grow. 

Where to Get Funds for Real Estate Investing 

Funds for real estate investing can be secured through conventional lenders, hard money lenders, private money lenders, seller financing, syndications, and alternative financing specialists. 

Seek Expert Financing Assistance 

Contact CapitalAx Commercial Lending, based in Lubbock, TX to get the financing you need to establish and grow your real estate investing enterprise. We offer a wide range of commercial finance programs to help you achieve your goals. We are Texas-based but work with businesses nationwide providing expert alternative lending solutions.