Three Residential Real Estate Investment Trends to Watch This Year

Written by: Phil Bradford

There is no doubt in the old saying that knowledge is power. And, of course, knowledge and information on a broad range of topics are absolutely necessary for any self-respected investor. 

The housing market has been undoubtedly interesting to follow in the last couple of years. But, certain changes bring more answers than questions. How powerful and long-lasting is the COVID-19 pandemic influence on the industry? What will happen to mortgage rates? And, finally, what to expect next? In this article, we will take a closer look at trends and tendencies that unfold in real estate investing right now. 

PropTech Gains Momentum

The real estate landscape has changed considerably since the beginning of the COVID-19 pandemic. Certain trends swiftly emerged solely due to the pandemic, while other existing tendencies were put into the spotlight. Some of them already fade away as the world gradually bounces back to life as we know it, but some will remain in the industry. 

One of those trends worth taking a closer look at and investing in 2022 is proptech or property technology. Showing outstanding value during the pandemic, technology became a life-saving tool. This event encouraged landlords, real estate agents, and all those who have to manage real estate properties in one way or another to incorporate technological solutions into their work process. For years, the real estate industry has been quite restrained when it comes to adopting technology. But, this pattern was broken when the need for contactless solutions struck in 2020. As the latest report of the PwC suggests, interest in the proptech technology and its future is high, which is indicated both by the high levels of funding and the high confidence in the proptech potential among investors. Investing in proptech is also very versatile, as it is suitable for any investors, no matter their experience level or financial input. For example, right now, there is a fundraising campaign for Rentberry — the long-term rental platform that offers a fully contactless rental experience, where you can invest as low as $300. 

Climate Change Risks and Opportunities

The whole world is speaking about climate change and how it affects companies and individuals at present, and what impact it will have in the future. Surprisingly, this topic is not that widespread among the real estate crowdfunding community yet and has only started gaining recognition. 

A recent study from McKinsey&Company illustrates that investors should re-evaluate their real estate portfolios, taking into account climate change risks. Two main points of reference include transition risks and physical risks. Physical risks are fairly easy to assess, as they encompass floods, storms, fires, and other natural factors. Transition risks might be more difficult to estimate as they include potential changes in the economy, technology, consumer behavior, and law regulations. 

So, what does it mean for you as a real estate investor?

First of all, don’t overlook climate transition when reviewing your current and future investment projects. Also, make sure to prioritize turning to energy-efficient systems and decreasing carbon emission levels in your properties. And remember: the climate change factor can have an influence both on single properties as well as entire markets. 

Sun Belt’s Popularity Keeps Growing

Amid the COVID-19 pandemic, many experts believed that the shift to suburban living would be permanent and declared that cities were dead. Fortunately, as we see right now, cities are coming back to life, but the trend towards migration to cheaper locations is certainly staying strong. The changes during 2020 and 2021 brought a new reality with a massive shift towards working from home. While there are still debates about whether the WFH mode is here to stay for the time being or the society will opt for the hybrid work model, one thing is definite. People have become more flexible in choosing a place to live, with many taking out of the equation work opportunities in the given city.

This flexibility shaped the demand for housing, with the hottest location in the country since 2021 being, undoubtedly, the Sun Belt region. Although we could see the beginnings of this tendency a few years ago, the last two years have definitely made this drift only more prominent. 

There are a few reasons why the south of the US became so attractive for renters and homeowners alike. Among them, you can name the weather, lower taxes, and more beneficial laws for businesses. As many people gravitate towards the Sun Belt states, so do real estate investors. And, we believe that 2022 would still be a good time to invest in properties in the region. 

Related: Investing in Single Family Homes

Phil Bradford is a financial content writer and an enthusiast. He has expert knowledge about personal finance issues and he is a regular contributor to DebtConsolidationCare. His passion for helping people who are stuck in financial problems has earned him recognition and honor in the industry. Besides writing, he loves to travel and read books