2021 Best Types of Real Estate to Invest In
If a recent survey of real estate investors shows any signs of this, 2021 will be a year of opportunity zones, investing in apartment buildings, rental apartments, and medical properties.
What’s not on the agenda? Retail (surprise) or office (even less surprising) investments. Hotels and hotel operations are also at the bottom of the list.
At least that’s what more than 1,000 real investors suggested in a recent RealtyMogul poll conducted earlier this year.
Have you decided what types of properties you will be investing in this year? Let’s examine what other investors have on their agendas.
Top real estate sectors
When asked which sector is the strongest buying opportunity this year, investors almost certainly turned to apartment buildings. It is a little surprising that rents are gradually balancing out and vacancy rates have remained constant over the year. In this area too, approvals are on the rise, so that more products should come onto the market soon.
Immediately behind apartment buildings were single-family houses that were being built for rent. Rental apartments have recently gained momentum, especially as the affordable housing crisis has intensified. Investors don’t even need physical properties to participate in the boom (rental REITs and stocks from BTR-kinky builders like Lennar and Meritage are also options).
Medical investments took third place for investors, but only just barely. Warehouses and industrial properties weren’t far behind.
What won’t be hot
The impact of the pandemic is clear when you look at the bottom half of the investor lists.
Sale? Beaten up by the pandemic. Office space? That was hit worse. (Manhattan office space is currently at its highest level in three decades.)
According to investors surveyed by RealtyMogul, hotels and hospital purchases also have little chance. This isn’t all that surprising, given the damage the travel industry has wreaked over the past year.
Opportunities in opportunity zones
Investors apparently also have the option to invest in opportunity zones. Over 40% said they wanted to invest in OZ this year (although surprisingly almost one in five doesn’t know what opportunity zones are).
Even so, it’s a topic that concerns many investors these days, especially when the house is considering the Opportunity Zones Extension Act. Legislation would extend the program for another two years – until 2028.
Nothing is known about this legislation yet, but according to our own Matt Frankel, 2021 could be the “year when the program becomes more prominent”. Only time can tell.
The final result
The pandemic has undoubtedly shifted investor focus over the past year, but it’s likely not over yet. As vaccines become more prevalent and the economy (and travel) opened up, the outlook may change. So stay tuned to Millionacres for the latest insights.