Affordable Housing and Real Estate Investment

Affordable Housing and Real Estate Investment

Recently, the problem of housing has come to dominate the conversation in many countries around the world. The UK, with its tradition of council housing, has faced shocks to its system. Housing is more and more out of the reach of many working people there. The US is facing a housing crisis, too. Migration of millennials to cities has created increased demand for housing there. This has driven rents up and out of the reach of working-class people. It almost seems that no matter where you are, rents are soaring up and reasonably priced homes are far and few between.

A companion problem is that working-class wages have stagnated since the Great Recession. Working-class people often lack cars and can’t find a workable way to make a move to the suburbs. All of this has created a seemingly intractable housing crisis in cities like New York, San Francisco and Los Angeles. All of this has been immensely frustrating, both for the people who live in these cities and for politicians. However, there’s also a great opportunity in this crisis, if only people will take the time to think it through.

Currently, four out of ten low income people are either homeless or spending over 50% of their income on rent, which is unsustainable in the long-term. The US is short by at least several million low income housing units. This is a tremendous opportunity for investors, if they are able to play it right. Social housing in the United States often gets a bad name. However, there are real advantages to landlords when it comes to dealing with social housing programs.

For example, section 8 arrives on time every month. Renting to lower income tenants can mean missed, partial or late payments. Dealing with government agencies means much more reliable cash flow, even if there can be a lag initially. Social impact investment firms have also made affordable housing one of their pet causes. Groups like Turner Impact Capital and Building Opportunity have made it a point to focus on affordable housing. This investment takes many forms, from crowdsourcing online to REITs.

Avalon Communities, a company known for providing corporate apartments, has also shifted their focus to renovating older buildings for more middle-income and lower-income clientele. As these big investments by big players demonstrate, there’s a very healthy future in providing low income housing.

Is Real Estate Crowdfunding a Good Investment?

Is Real Estate Crowdfunding a Good Investment?

Real estate crowdfunding is gaining momentum as an opportunity for investors to get in on the ground floor of real estate investing. While other types of real estate investing require industry-specific knowledge or a hands-on approach, crowdfunding offers a less complex method for getting involved. While it does allow investors to get into real estate investing without getting their hands dirty, is it really as worthwhile as it seems?
The Attraction for Investors
There are numerous real estate crowdfunding sites online right now and each one seems to have no trouble attracting new and seasoned investors. This is partly because of the 2012 JOBS Act, which broadened the methods for raising capital and allows companies to openly advertise investment opportunities. As more companies take advantage of these new rules, investors are expected to see a broader range of choices. Real estate crowdfunding companies may start to specialize in certain types of properties, which will allow investors to diversify their portfolios and maintain better control over their investments.
What Does it Cost?
As with any form of investing, there are fees associated with real estate crowdfunding, although the fees tend to be lower with companies that require higher opening balances. For example, CrowdStreet requires you to invest at least $10,000 over a 36-month period, but doesn’t apply a fee. At the other end of the spectrum, Fundrise lets you get started for just $500, but they do apply a 1% fee. Roboadvisors offers one of the lowest ranges of fees, coming in at 0.25% to 0.60%.
What’s the Bottom Line?
If you’re the patient type, you can do well with real estate crowdfunding. You will have to be comfortable with having your investment capital tied up for a period of one to five years, but, at the moment, the average real estate crowdfunding project does do well. How well? You can expect an annual return of 14.6% on closed transactions. An added benefit of real estate crowdfunding is that it offers new investors an easy way to get started, while also offering investors plenty of opportunities to diversify their investments. Real estate crowdfunding is still relatively new, which may explain why it offers the potential for such high returns. As it becomes more widely known, financial forecasters expect those returns to level out and fall in line with the returns we see in other forms of real estate investing.
Pros & Cons of Investing in Industrial Real Estate

Pros & Cons of Investing in Industrial Real Estate

Investing in real estate is nothing new. People have built fortunes on renting out properties to others. Traditionally, people consider properties like townhomes and apartments when it comes to investing. However, the industrial sector is one niche that can provide many benefits for the average investor.

The Pros

Industrial real estate means dealing with businesses instead of regular people. This translates to longer leases because businesses aren’t likely to change out their location too often. It’s not a surprise for industrial real estate investors to rent out to the same business for decades at a time. It’s much easier to only have to handle getting in one client every ten years than having to worry about a new tenant every year.

Industrial buildings are plain. This allows for any business to really come in and set up their processes and equipment with freedom. This is very much in contrast to a rental home where the main sections of the home, such as the kitchen and the bathroom, are already pre-built and can’t be changed. Businesses tend to pick their locations based on the square footage the property can offer them over traditional factors, like the set up of the building.

The Cons

With every good wealth-building strategy, there are always cons to the pros. When it comes to investing in industrial real estate, there are definitely some cons that everyone should know about before jumping on board. With industrial buildings, we’re talking larger real estate. Larger real estate translates to higher costs to purchase facilities. It’s also important to note that there are less industrial buildings for sale than traditional homes. So it’s going to require some extensive searching in a market or opt to expand out into other market areas to find the right properties.

When renting out an industrial building, it’s likely that the lease will only be renting out to one business at a time. This can have the pitfall of all or nothing income. If the tenant doesn’t pay their rent, then the property owner will be left footing the mortgage bill out of pocket. This can be a drawback for those who would rather have a property rented to multiple tenants.

Investing in industrial real estate is nothing new. People have been doing it for many years. However, investing in the industrial sector comes along with many pros and cons that any investor should be aware of before jumping in headfirst.

Safer Real Estate Investments During a Recession

Safer Real Estate Investments During a Recession

Countless successful investors have a diversified portfolio that includes select real estate investments. Due to the cyclical nature of the nation’s economy, there are times when it is naturally more advantageous to invest in real estate. Real property, whether residential, commercial, or industrial, is generally considered a long term investment. Decades of economic growth and recessions have proven that no type of investment can be considered safe or recession proof. However, there are several proven ways to designate investment portfolio options in a way to prevent unnecessary fluctuation. Real estate investments can be safer than many other investment vehicles during the inevitable storms of recession.

Rental Properties

Investing in rental properties has been a lucrative career move for many different types of investors. Whether experienced or novice, real estate investors soon learn the ins and outs of successful property rentals. Individual rental properties such as single family homes, townhomes, condominiums, or duplexes are a great starting point. These investments, when properly managed, will provide some protection against inflation and recession.

The key to safer real estate investments during a recession is to carefully select renters. When taking on a new tenant, consider their consumer credit, employment, and criminal background. This will provide a fuller picture of the individuals before they sign a lease agreement. Reducing turnover and keeping rental units occupied are essential for long term investment strategies to be successful. Shelter is necessary for survival and tenants are not going to stop paying rent during a recession. They may discontinue cable subscriptions or gym memberships, but they will maintain their housing.

Vacation Properties

Depending on the location, a real estate investment in vacation property can provide consistent income year round.  Especially when the location of a property is located in popular vacation spots like Miami, New York, or Las Vegas.  Unlike standard rental properties which require ongoing property management services, vacation properties are relatively simple to manage. Turnover services may include simple tasks such as cleaning, providing new linens, and managing inventory supplies. These routine turnover items can be contracted out to a local service provider for a very low fee.

Whether a new investor decides to purchase a modest home for the intention of renting to a family or has the resources to purchase an entire apartment building, they will likely find that real property is a worthwhile investment. Rental properties provide consistent income streams and virtually pay for themselves over time.

4 Tips for Investing in Self-Storage Real Estate

4 Tips for Investing in Self-Storage Real Estate

Investing in self-storage real estate has a number of key advantages. This growing market offers the opportunity for many owners and investors to generate a passive income stream that can help support them long-term, often without the risks and responsibilities associated with traditional property investments.

Self-storage is always in demand. When the economy is high in a given area, many people will invest in new possessions, leaving them with the need to store their current possessions. When the economy is low, those same individuals may need to downsize their homes and other key expenses. Before diving in with self-storage investing, however, there are several things any investor should carefully consider.

1. Know the Market

Investing in self-storage units starts with understanding the current market. An interested investor should take a look at the current availability of self-storage units in the area. Is there plenty of availability, or are current self-storage facilities struggling to keep up with the demand? By better understanding the market, it’s possible to make more effective buying decisions.

2. Check the Property

Before purchasing an existing self-storage facility, investors should examine the property. Taking a look at current profits and expenses will give investors a good idea of the kind of return they should expect.

3. Evaluate Improvements

In some cases, investors will need to make improvements on their self-storage units after making the purchase. In order to determine accurate profits, it’s important to consider how much those improvements will cost and how long it will take them to start turning a profit. In some cases, improvements may make it possible for investors to raise the rent on their units. In other cases, the market will not support the corresponding increase in rent, which means that investors should calculate that difference before beginning their improvements. A careful evaluation of the market before buying can make it easier to determine how much of an increase the market will support.

4. Prepare Some Cash Reserves

Like any other type of property investing, self-storage investment may require some cash reserves, especially in the early days of the investment. Having these funds on hand can make it easier for you to weather any storms in the market.

Making the jump to self-storage investing is a big step, but it’s one that is often well worth it. If you’re ready to see a change in your investment strategy, consider investing in self-storage today.

The Impact Of Natural Disasters On Prime Property Markets

The Impact Of Natural Disasters On Prime Property Markets

Prime property markets like beachfronts can be impacted by numerous changes. One such factor is natural disasters. When any type of such an event like a hurricane, earthquake or wildfire occurs, highly desirable property markets could:

Increase Insurance Rates

Because prime real estate is often is exclusive, high end locations, associated property is quite costly. In such instances, property insurance is usually high to begin with. However, in the wake of a natural disaster, such locations might witness skyrocketing insurance costs. Furthermore, some insurance companies might be reluctant to offer insurance policies to individuals who own property in regions that are currently being impacted or have historically been hit by a string of natural disasters,

Decreased Property Values

When a natural disaster impacts a specific area, decreased property values can result. A region that is hit by a major disaster can be viewed as damaged goods. In other instances, property evaluators could subscribe to the philosophy that if something of that magnitude happened once, it could certainly occur again.

Decline In Demand

Property situated in a region directly impacted by a natural disaster might be in less demand following the event in question. waning interest could force individual property owners or real estate agencies dramatically lower the asking prices of homes built on such properties. Decreased asking prices could mean a precipitous drop in profits.

Altered Environments

Certain natural adverse natural events forever alter the landscape of specific environments. For example, what might have been expensive beachfront property might be completely washed away by a hurricane. Such storms could cause such pronounced flooding, erosion and wind damage that existing properties are totally destroyed and the landmasses they existed on become uninhabitable.

Diminished Sellable Property

Along the theme of altered environments comes the prospect of a diminished amount of sellable property. Should entire exclusive neighborhoods be burned to the ground by wildfires or washed away by a hurricane’s floods, there is less property to sell. Less property equals a diminished market.

Outlook

Unfortunately, some scientists opine that climate changes will only continue to increase the occurrence of natural disasters. Therefore, real estate agencies might one day revise their strategies and help ensure that those who purchase homes in vulnerable locations safeguard their properties as much as possible or consider purchasing property in less risky locales.

Why Invest in California Real Estate

Why Invest in California Real Estate

While California may have a reputation for being one of the most pricey real estate markets in the world, it has proven to be one of the best areas to invest in. Investors who are looking to get single family real estate properties have a golden opportunity to do so. The golden state offers up gorgeous beaches, vibrant culture, and an ever-growing population for those looking to invest. With the land of opportunity awaiting new investors, the opportunity to capture returns on the rising home values is just around the corner.

California has an extremely strong job market which serves as one of its most attractive attribute to investors. The state boasts 54 of the Fortune 500 companies headquartered right here in their very own backyard. The market shows that California will continue in job growth, and will provide investors with a continuous cash flow as more and more people are flocking to the state.

While the rising cost of homes is pricey in the area, the state has rather low property taxes. Though California may not have the lowest property taxes across the country, the tax rates are aimed to help those investors who are looking to improve the flow of cash. Low tax rates mean that more and more people will continue to buy and rent in the area. Any area that people may feel they can capitalize on, is one in which they should consider to invest in.

There is an extremely high rental demand in the state of California. Everything from work, weather, entertainment, outdoor activities, and the overall growth has helped to make investing in California real estate one of the smartest financial moves right now. As this growth continues, the rental rate within the state will continue to go up over time.

Between the job market and desirable lifestyle that California has to offer, it only helps to increase the home values in the state. The housing market is one in which the most desirable areas to live constantly attracts new home buyers. This presents a high demand for the areas which in turn increases the property value in the state. This is just an additional reason to invest in California based real estate.

How to Build Your Real Estate Investor Network With Social Media

How to Build Your Real Estate Investor Network With Social Media

Social media is a powerful tool that many real estate investors use to build their professional networks. Whether you like social media or not, it is changing the way people in all industries market their services and build relationships. If you want to build a real estate investor network using the internet and technology, you should embrace social media as a business tool rather than looking at it as just a place to connect with friends.

Delivering High-Quality Content

If you want to establish yourself as a real estate pro, you must show people you are a leader in the industry. You can accomplish this by delivering high-quality content related to real estate investing using social media. If you have unique ideas and concepts you want to share with professionals in real estate, you can produce and promote those ideas in the form of content on social media.

You can post blogs on LinkedIn, post pictures related to what you do on Instagram or post real estate updates on Facebook. Another great idea is creating short informational videos that are eye-catching. Visual based content is a great way to attract audiences.

The possibilities are endless regarding how you can deliver content on social media to establish yourself as a thought leader. However, the content must be unique, and it must be your own. Recycling bland and cookie-cutter content that is plastered all over the internet is a sure-fire way to lose any credibility you have established. Take the time and create something new and original, it may take time but it will be worth it.

Connecting With Other Real Estate Pros

It is in your best interest to connect with as many real estate professionals as possible. Social media platforms, if you use them correctly, are a powerful tool to connect with others in the industry. LinkedIn is a social media platform specifically for business professionals, and it is popular among real estate investors. If you can learn to how to navigate LinkedIn, you will attract the attention of those who matter in the industry.

The idea behind using social media as a real estate investing tool is to communicate and engage anyone who might become a partner or a client. Social media is also a great way to promote what you offer as a real estate investor. However, avoid using sales pitches to promote yourself, especially on LinkedIn. You want to provide value to anyone who reads what you have to say on social media

Millennials and Real Estate Investing

Millennials and Real Estate Investing

For many Americans, owning a home has long been the way to accumulate wealth. Over the years a home will appreciate in value, or so people assume. Investing in the stock market, for those who have the means, is also an effective way to build wealth over the years.

A decade ago, when the housing market crashed in the Great Recession, the idea of building wealth through real estate was shattered. People saw how real estate values can fluctuate. Still, many millennials who witnessed the housing crash, are eager to invest in real estate. In fact, a recent real estate investment report delivered survey results showing that 55 percent of millennials are interested in real estate investing. Here are three reasons that millennials are interested in real estate investing.

Growth Over Time

The subprime mortgage crisis sounded the beginning of the Great Recession back in 2008. The bubble in the real estate market burst and housing prices plummeted. The real estate market has had a long climb back over the past several years. The point that millennials see though, is that the market did come back. The millennial generation did not rush into home buying, but now are moving into the home buying phase. They are the largest generation of Americans and will have a profound affect on the housing market.

Stock Market Skepticism

Anyone who has taken even a slight interest in the stock market knows that stocks go up and down. However, the millennial generation had a harsh, real-life lesson in this aspect of the market. Many millennials graduated into the Great Recession and the daily headline news about Wall Street crashing and people losing retirement savings. A large portion of millennials believe that real estate outperformed the stock market since 2000, and they are correct. Their witnessing of the Great Recession may make the millennial generation more likely to be skeptical of the stock market.

Real Assets

In this age of information it is easy to gather data about investing. The methods of investing in real estate are available to any millennial who wants to do some research. There is a tangible element to real estate investing that may appeal to the millennials sense of self-image and desire for uniqueness. In fact, findings show that 85 percent of millennials think real estate is a good investment.

Older generations may be interested in downsizing at this point, but millennials are starting families and advancing their careers. These facts, along with the great potential for positive returns, make buying a home and investing in real estate an appealing next step for millennials

Real Estate Startups That Are Changing the Industry

Real Estate Startups That Are Changing the Industry

With the digital era making almost anything available through a smartphone or computer, several startup companies recognized that buying and selling homes should be no different. Digital real estate companies are starting to flood the market and in the process changing the face of the real estate industry. Will real estate agents become non-existent in a few years? The answer is most likey going to be a no. However, if these three companies have their way, it will be sooner rather than later.

Roofstock

Founded in 2014, Roofstock is an Oakland-based company that provides a marketplace for single-family rental units. The company offers leasing for single-family homes and made them available outside of the multiple listing service. Using machine learning and AI, rental property owners can market their properties to investors who want to forgo the hassle of managing the day-to-day operations. Roofstock eliminates the need for real estate agents in the rental investment property space.

Fundrise

Founded in 2010, Fundrise combined crowdfunding with real estate to eliminate the perception that real estate investing was exclusively for the rich. Entry-level investors can put up as little as $500 to participate in real estate investments. Small investors can invest in rental properties, commercial properties or eREITs (electronic real estate investment funds). Fundrise’s business model treats real estate investing more like stock investing by paying dividends and earning money from asset value increases.

Opendoor

Opendoor is a company looking to change the way people buy and sell real estate. Founded in 2013, this Phoenix-based real estate company allows homebuyers to list their homes without the assistance of a real estate agent. Home sellers can fix their places up, list them with Opendoor and sell them quickly, according to the company. Opendoor’s goal is to simplify the entire real estate transaction.

Homebuyers can browse listings and schedule a self-guided tour if they find something that interests them. However, buyers must either put in an all-cash offer or get financing from a lender before they can put in an offer. Opendoor offers a 1 percent rebate to homebuyers to help cover closing costs.

With a few taps of a smartphone or laptop keyboard, people can buy or sell their homes in a manner of a few days. Although many of these companies and the technology they use are in their infancy, it may not be long before nearly every homebuyer or seller completes the entire process online.