4 Smart Real Estate Investment Opportunities for 2023
As a real estate investor, you should have a razor-sharp focus on growing your business. However, this is easier said than done. Following the COVID-19 pandemic, the real estate market is still in its recovery phase.
While 2023 is expected to be a better year than the preceding years, investors are still struggling to find low-risk opportunities that yield a high ROI. On paper, there’s a lot you can do: bonds, stocks, mutual funds, exchange-traded funds, and so on. However, these ideas don’t always work out well in practice, especially while the industry is still recovering.
As an investor, make sure you look for realistic real estate investment opportunities with a high probability of success. In this blog, we’ll walk you through four opportunities that will help you grow your business at a steady, consistent pace. Let’s begin.
1. Become a Rental Property Owner
If you’re looking for a safe opportunity that carries the least amount of risk possible, become a rental property owner. This is an excellent option for investors with multiple projects in the pipeline who can’t afford to add a time-consuming, complex, and laborious project to the list.
Make sure you have strong tenant management skills. If you have the capital needed for financing upfront costs and covering vacant months, make full use of this opportunity. You’ll earn a regular income, and the property will appreciate with time.
2. Fix & Flip Like a Pro
You can’t go wrong with a well-executed fix-and-flip project. If you’re an experienced real estate investor, you can maximize your revenue by purchasing, fixing, and flipping the right property at the right time.
Make sure you budget like a seasoned pro. Before you begin, estimate the costs and leave a cushion for unexpected expenses.
Between January 2021 and 2022, there was a 20% increment in construction material costs. As we head into 2023, costs are lowering. However, predictability is a luxury that the real estate industry is not afforded. If you spend too much on construction, your flip will not be as successful.
Holding costs can also get out of hand if you get permits too late, get the materials delivered, and so on. If you keep the property for way too long before flipping it, you’ll deal with a tighter profit margin.
Keep the basics in mind before you begin: property taxes, interest rates, transfer fees, and so on. Don’t rush the process; take your time and kick-start a robust project that yields the intended outcome.
Recommended Read: Understanding Fix & Flip Loans
3.Invest in More Short-Term Rentals
You can invest in two main types of properties in 2023: short-term and long-term rentals. Short-term rentals, like Airbnb, target rotating tenants who don’t plan to stay for long. They may stay for as less as a day.
Short-term rentals are extremely popular in 2023, and they’re expected to gain even more traction. Following the COVID-19 pandemic, people are traveling more frequently than before. The U.S. Travel Foundation has predicted that travel spending will increase in 2023, more so than 2019 (pre-pandemic).
People are increasingly planning weekend getaways and short trips. By purchasing property and using it as a short-term rental, you can make a hefty profit.
There will be a lot of work required. As the property owner, you’ll have to take care of cleaning, maintenance, design and décor, repairs, and any other problems that may arise.
If you want to reduce the hassle and stress, consider partnering with a property management company. Of course, this will reduce your overall revenue. However, it’ll make things much easier, especially if you have a lot of other projects on your plate. Think wisely and make a decision that pays off.
4. Work with Experienced Investors
If you’re new to the real estate investment industry, don’t rush the process. Many up-and-coming investors make critical mistakes within the first few years of starting professional work. While some mistakes are minor, others can be costly. Your reputation and financial standing may be affected.
If you lack experience, market know-how, and expertise, work with experienced investors who can take you under their wing until you’re ready to make good investment calls that pay off. This is an excellent way to reduce risk and maximize profitability from the get-go.
Yes, it’s still important to make mistakes and learn from them. However, partnering with experienced investors ensures that these are small mistakes that you can easily recover from, not critical errors that take you back to square one.
Master the art of negotiation and networking. You must be familiar with local real estate market practices, rules, and regulations. Having deep insights into the industry will help you make smart calls, grow your business, and keep investing like a pro.
The learning process never stops. As long as you remain open and curious, you’ll keep absorbing knowledge like a sponge and take your real estate business to new heights with the power of good investments, management, and overall decision-making. Good luck!
If you’re ready to start exploring these real estate opportunities, we can help. At InstaLend, we provide flexible rental loans with great terms. Explore our loan options:
- Fix & Flip Loan
- Single-Family Rental Loan
- Multi-Family Bridge Loan
- New Construction Loan
- Multi-Family Term Loan
By offering a high approval rate and fast funding, we help you get the required funds within the desired timeframe. Once you approach InstaLend, you can rest assured that the lending process will be smooth and stress-free.
Consult our loan experts to get started. If you have additional questions, our team is always happy to help.