The real estate sector is always a popular market for investors and 2021 is unlikely to be any different, despite the challenges we have all faced in the past year, and despite the fact that 2020 was a rough year for the property market in many ways.
If you plan to invest in real estate in 2021, here are the biggest opportunities for you and your money:
Adaptive reuse of commercial properties
Businesses in all sectors from hospitality to office-based operations took a hit when the global pandemic descended upon us all. Unfortunately, that meant that many of them were put out of business completely, and as a result, there are now a lot of commercial properties sitting there doing not very much.
That may be bad news for the businesses involved, but it could be very good news for anyone who wants to invest in real estate in 2021. Why? Because there is a real opportunity to take these commercial buildings and adapt them for different types of use, such as converting shops into residential buildings. This may sound expensive, but considering the fact it is very possible to buy commercial property for a steal due to various companies folding, it could be one of the best ways to see a decent return on your money in real estate right now.
Industrial real estate has consistently been one of the best-performing sectors in the commercial real estate market for several years now, with more demand for it than ever before in previous years. Coronavirus has only made the need for decent commercial space more important, as increased pressure was placed on distribution, storage, and warehouse services. There has also, due to work from home practices, been a rise in demand for data centers. Chances are this isn’t going to change any time soon because although there has been a lot of good news surrounding the pandemic, many of the practices that have been put into place to deal with it are likely to stick around. This could mean big returns for anyone who is able to invest in suitable industrial real estate in 2021 and beyond.
Peer to Peer lending
Have some money in the bank doing nothing? Why not lend it to someone who wants to buy a property. This could be a private individual or a corporation looking to expand its portfolio. You’ll earn interest or equity and you can watch your money grow. There are numerous P2P websites that will let you do this and as more and more people realize their potential as an alternative to getting mortgages and loans from the bank, they are going to explode in the coming months and years, especially when cryptocurrencies can be used to make these kinds of loans.
The pandemic has also caused far more people to default on their mortgages in 2020, with many analysts predicting another wave in 2021. This could well lead to a huge number of foreclosures. If you’re in the lucky position to be doing well when this happens, you could end up getting a real bargain by snapping up a delinquent loan on a nonperforming mortgage. Obviously, we don’t know for sure if things will get that bad, but it’s worth having the knowledge that it could happen in the back of your mind if you want to invest in real estate, but you want to do so at the optimum time. Maybe hold off for a while and see what happens.
Rental property sales
If things get tough, many landlords in the areas that have suffered the most from the pandemic and other trying economic factors could end up selling their properties on. If this happens, you could steal a bargain by purchasing one of those rental properties for your own portfolio. If you can do that and ride out the tough financial circumstances that made them sell in the first place, you could do pretty well off the back of the very depressed rental market that the seller fell foul of. This is one investment that you’ll need to be in for the long-term, but it is definitely one worth considering.
Some might say you would be mad to invest in holiday homes in the midst of a global pandemic, but restrictions are being lifted all over the place every day and there is a not insignificant light at the end of the tunnel. Pretty soon everyone who has been prevented from going much further than their own neighborhoods for the past year or so is going to start getting out and about more. Hotels in Las Vegas are going to be fully booked, apartments in Icon City are going to be in high demand, beaches in Barbados are going to be packed to the brim, and if you’re smart you’re going to make a lot of money. Buy a vacation rental now and watch the money roll in as we wave goodbye to the pandemic restrictions we’ve all been living under for so long.
Buying properties that need some work, renovating them, and then selling them on for a profit has always been one of the most popular ways to invest in real estate and that is unlikely to change in 2021. Freshly renovated homes are in high demand and a lot of homeowners are being forced to sell up due to their financial circumstances, so if you can get in on the ground floor, buy at the lowest possible price and go for a quick sale, flipping houses could be the very investment you have been looking for.
Although this is not an exhaustive list, we really do think that these are the biggest and best real estate opportunities for 2021. If you do your due diligence, get the best possible deals on your real estate purchase, and hold your nerve, you could do pretty well in the real estate market this year, even if it doesn’t seem possible at first glance.