How does geography affect modern real estate investing? Within the last 20 years, the Internet has revolutionized the investment industry and minimized investors’ need to visit potential investment properties in person. While all real estate is local, investors can invest from anywhere.
With a service like HomeUnion®, people are able to investigate properties across the nation without leaving their homes. HomeUnion® provides deep insight into the best markets for investment, and maintains data on everything from local business and economic trends to the percentage of owner vs. renter-occupied properties in a given neighborhood. That gives our customers unprecedented insight into the economic situation surrounding single-family rental investments.
While geography is less of a barrier than ever before, the Internet introduces new competitive considerations for investors, who should keep the following realities in mind:
1. Investing is international
Advanced communication makes it simple for nearly anyone to purchase property anywhere on the globe, and international real estate investment is a huge business. The National Association of Realtors’ most recent International Home Buyers Report discovered sales of single-family homes to international buyers accounted for $59.93 billion worth of business for the 12 months ending in March 2014. The total number of all real estate sales to international buyers increased 35 percent over the previous year, and 56 percent of sales were related to the security and profitability of U.S. real estate investment.
Security and profitability are the two driving factors in U.S. real estate investors for citizens and foreigners alike. U.S. property laws are highly developed and make it easy retain property, which is not the case in some foreign countries, where lax property law enforcement makes investment a risky proposition.
Foreign investors are likely to remain a critical part of the U.S. retail market in the coming year. A low dollar helped spur investment from buyers last year, but the greenback posted strong gains against other world currencies through the end of last year, and some predict it will continue climbing throughout 2015, according to PoundSterling Live.
This presents an opportunity for both American and international real estate investors, who will be able to benefit from a strong dollar, proving that geography doesn’t impact a person’s ability to invest in US properties.
2. Proximity doesn’t matter
The prevalence of international investing demonstrates a shift that also benefits U.S. investors. While hardly anyone would have purchased property without visiting the location 20 years ago, the Internet makes it easy to diversify investments with properties all over the country. In the past, investors had to visit a property to assess its value and then work with independent management organizations to ensure the property’s upkeep.
Now, companies like HomeUnion® take care of vetting investment markets, locating properties, handling maintenance and managing tenants, which leaves investors free to pick the best real estate investment options for their portfolios. Without HomeUnion®, an investor who wanted to purchase properties in geographically disparate regions outside their local area would need to undertake a great deal of research and due diligence.
Not only would they have to locate properties and discern which locations could deliver the highest ROI, but they would need to handle a variety of administrative tasks, such as finding property management in every location. HomeUnion® takes care of these burdensome issues and allows investors to focus on choosing the best properties that fit their investment goals.
3. Local trends are crucial
While it’s easier than ever to invest in distant properties, it’s still critical to keep close tabs on local economies and trends. For example, the 6 percent uptick in Chicago renters between 2006 and 2013 was one of the highest in the nation, as noted by the Furman Group. While it’s not necessary for investors to live in Chicago to capitalize on this shift, they must remain engaged with the region to successfully grow wealth.
While the changes in Chicago’s housing trends track with national housing market shifts, manufacturing jobs growth that outpaced the U.S. between 2010 and 2012 presaged these changes, according to Crain’s Business Chicago. Savvy housing market investors who leveraged these local trends into high-yield Chicago investment properties used geography to their advantage and will continue to benefit from the area’s economic growth.
Using a combination of deep data analytics and boots on the ground, HomeUnion® identifies locations with high growth potential and presents properties for investors. Register to view available properties and diversify your investment portfolio with single-family rentals.