Have questions about real estate investing in 2022?
After a couple of very interesting years, what can we expect from the markets and our portfolios now?
Below we answer the six most asked real estate questions investors have about this year, with the insights you need to successfully navigate what is next.
What Types Of Returns Can I Expect?
This will vary largely by what you invest in, how, and with.
There may certainly be some real estate investors who take losses by investing in the wrong assets and strategies, with the wrong operators, and especially in the wrong locations.
At Greystone, real estate investments are still being targeted with double digit returns. That is 10% or higher.
Investors should be demanding high return real estate investments, but only when those returns are risk adjusted.
Which Direction Is The Market Headed In?
All real estate is local. The opportunities will come down to how great the management and execution are as well.
However, overall, experts see no logical reason that the current run in rising rents and asset prices should stop. Many markets are seeing 30% plus annual increases in value and rental rates.
Even if that slows to 7%, investors should be quite happy and find that real estate continues to outperform other asset classes.
There may of course be exceptions to this. Such as San Jose, CA where investor concentration has been accounting for over 40% of all single family home purchases, according to CoreLogic. Or NYC, where some of the harshest restrictions and mandates are causing a massive exodus of residents, workers, businesses, and wealth.
Will There Be More Inventory Available?
One of the top complaints of home buyers and investors over the past couple of years has been the limited amount of publicly advertised property inventory. Which has in turn created fierce bidding wars.
With the most extreme inflation across living costs expected to only begin kicking in during Q1 2022, and eviction protections ending, it is quite likely that there will be more properties available to buy, and more motivated sellers.
However, gaining access to the best deals on the best prices and terms still largely comes down to having the connections and reputation.
How Can I Fund My Property Investments?
This is one of those real estate questions that is always trending. Fortunately, for now, capital for sound property investments and experienced operators appears plentiful. Forecasts are that this should even improve with secondary markets unleashing even more capital into this space.
However, higher interest rates, any dips in mortgage performance, or major bank collapses could limit credit availability for individuals.
Smart alternatives to taking on personal debt for financing real estate investments this year may include real estate partnerships and syndications.
Will COVID Disrupt My Investments?
Most of the nation seems to have come to the belief that COVID and its never ending variants are always going to be a part of the new normal. We now even have Flurona.
The biggest risks to the economy and country now seem to be somewhere between extreme mandates and restrictions and disbelief as those facing the most rules see their rule-makers partying maskless on vacation in Florida.
However, when it comes to the facts, real estate investors seem to have little to fear when it comes to this pandemic and their property investments. The worst years of the virus seem to have been record setting years for real estate investors. If it does disappear, then an economy that is bouncing back will spur more growth.
What Are The Best Types Of Real Estate Investments This Year?
There is certainly more than one way to invest in real estate this year. There are also clearly some types of investments and assets which seem to be begging to lose investor money.
The most obvious of these include publicly traded real estate stocks, private shares of hyper-valued tech startups, and office building investments.
Given all we have learned through the years of the pandemic, the most attractive options now appear to be in multifamily apartments, private real estate partnerships, and well located income property investments. Especially those which are truly passive real estate investments.
Summary
For some, the past couple of very eventful years has raised even more real estate investing questions. Yet, as you’ll find from these insights, that same chaos may have created more clarity, direction, and certainty for experienced real estate professionals.
Have more questions? Check out our FAQ section.