Location is everything when it comes to investing in real estate. Many of the current trends in the market encourage investors to step away from many of the more famous markets and put their money in other areas. Understanding those trends and the markets that they favor will be key to making good investments in 2019.
Look for Rentals
Rental properties are likely to be strong investments during the coming year due to the prevailing economic conditions. The economy is still growing, but most of the new jobs are for relatively low-level positions with low to moderate wages. The people in those positions will generally be looking for rental properties rather than buying houses. While there are going to be people who are looking to buy large houses, they are going to be in the minority and there will be less growth in that segment of the market than for rentals.
Seek Affordable Markets
It is also a good idea to focus on relatively inexpensive properties. Most of the people who are looking to rent a home will want something that is in the lower end of the price range because expensive rentals are outside of their budget. Investing in expensive rental spaces requires a larger investment up front and has more risk due to the smaller market for those properties, which makes them a very dangerous bet for most investors.
That means that it is often best to look at rental properties outside of the biggest and most expensive cities in the country, where property tends to be somewhat overpriced. Fortunately, there are a lot of promising locations where real estate is relatively inexpensive that are likely to see higher prices in the future due to those economic trends.
In general, the best real estate markets are cities of moderate size. Orlando and Jacksonville, both in Florida, are great examples, as is Raleigh in North Carolina.
They aren’t quite as overpriced as places like New York City or San Francisco, but they still offer plenty of jobs and amenities to attract new residents. Many of them have also been overlooked by investors in recent years, so it is easier to find good properties and a reasonable price. Many of these cities are clustered in southern states, but there are plenty of options all over the country just waiting for investors.