We’ve already seen regular home searches migrate almost exclusively to the internet, and 2015 is expected to take this even further. So what is driving these trends? How will individuals be investing in real estate online in 2015? More importantly, how can they do it in the safest and most profitable way?
2015 Real Estate Trends
This year is shaping up to be a far more exciting year for real estate investing than many expected. The new 2015 Global Investor Sentiment Survey reveals a whole world full of investors bullish about U.S. real estate. Over 80% of respondents anticipate the market heading up this year, with increased investment volumes. Additional research shows billions in capital waiting to be invested in 2015. More than three quarters of investors said they planned to increase their portfolios over the next 12 months.
Low interest rates, moderate asset prices, and lackluster alternatives are all working together to form a profitable landscape for income property investing this year.
Rising rents are to keep on lifting rental property spreads, and the influx of Millennial home buyers is starting a domino effect – which is rolling over into middle and high end luxury markets, creating more inventory and acquisition opportunities. Global interest in investing in America is forecast to keep up demand in gateway cities, while more turn to secondary markets for growth and yield.
Out of Area Real Estate Investing
While there will continue to be real estate investment opportunities throughout the U.S. in 2015, there is no question that individual markets will continue to turn at different stages; offering slightly different volumes, spreads and matches for separate real estate investing strategies. Serious investors looking to expand portfolios will naturally look further afield. This is especially true of sophisticated income property investors looking for buy and hold deals. Both newer and mature investors will seek more geographic diversification in their portfolios this year in order to sustain optimal returns and a strong safety net.
Direct Investment in Real Estate
Direct investment in income producing real estate assets is expected to continue to be a top trend in 2015. The last couple of years have seen the overwhelming majority of US millionaires choose this path to preserving wealth, building passive income streams, and achieving higher yields. Those still on their way to being millionaires are finding direct investment gives them the best edge in achieving gains, while preserving what they make. Both private equity and debt investors are still finding real estate trumps other options when they invest directly, and especially considering the low rates expected to continue for most of the year.
Real Estate Crowdfunding
The media has kept crowdfunding in the headlines, but not always for the best reasons. As more copycats have jumped on the bandwagon the Huffington Post notes the number of real estate crowdfunding platforms has rapidly risen to over 75, with more on the way. This is one form of online real estate investing that is catching attention, but has been criticized by sophisticated investors like the Shark Tank panel, as it has been marveled at for cool factor. The ability to invest out of area in the best quality and most profitable US rental properties from anywhere in the world via a smartphone or mobile tablet is great. Real estate syndications and partnerships certain still have their perks too. However, while interest rates are so low, and capital for borrowing so plentiful, most accredited investors may find crowdfunding unnecessary, and that most platforms lack the trust, reputation, and track record other options provide.
Turnkey Real Estate Investing
Tested and proven turnkey real estate investing programs really bring together all the best of out of area and online investing. The yields and cash flow can certainly trump publicly traded REITs, as does the security, low volatility, and net returns.
The one challenge some domestic U.S. property investors face is getting over the mental hurdle and embracing this investment strategy, while foreign investors that have invested this way for years swallow up all the best deals at a rapid pace. In fact, many turnkey programs now have substantial waiting lists.
Those that will be the most successful in investing and making new income property acquisitions this year will be those that take the best advantage of technology, choose their locations wisely, and who weigh each opportunity on its own merits.
