Best Places to Invest In Real Estate in 2021

Real estate investors can find opportunities in up and down markets.



Demographic data, real estate trends and personal criteria are all important factors, but the most important thing is location.

First, you need to determine the type(s) of rental property you want to add to your portfolio. There is a range of property sizes and different sets of characteristics to choose from.

Next, have a defined budget. Property valuations change depending on location, size and features, so knowing your budget will help you know where to start your search for your desired investment property. There are going to be a variety of costs, too, including closing costs, operating costs and property taxes, among many others. Your goal is to make a profit, so consider overall costs and recurring expenses that align with your budget to preclude you from taking a loss.

What are your real estate investment goals and how long will it take to achieve them? These are more questions real estate investors should keep in mind before getting ahead of themselves.

The aforementioned factors are essential to help shape your, which will serve as a guide for when you probe investment opportunities in different locations. Here's what you need to know about which places offer the best real estate investment properties in 2021:

  • Residential properties.
  • Industrial properties.
  • Commercial/retail properties.
  • Vacant land.

Residential Properties

As people continue to work from home, they may find that they need more space as they continue to move out of cities and into the suburbs. With much of the workforce reducing their commute or eliminating it completely, the amenities of a city center may not be a sticking point for renters, making a suburban setting more appealing.

The ongoing pandemic has people looking for more outdoor space and home offices, says Moira Taylor, co-owner and CEO of Taylor Made Realty in Atlanta. "Investors should consider the suburbs of major metropolitan areas, as they're an ideal investment and have seen an increase in buyer demand in places like Atlanta, New Jersey, San Francisco and other major city suburbs," she says.

Taking note of these trends, real estate investors may turn to the suburbs for residential rental opportunities. An important question investors should ask themselves is: "Can I earn enough in rent to cover costs?" says Bill Walker, the chief operating officer for Kukun, a real estate data company based in Menlo Park, California.

"I like to do a complete analysis of all of the different costs that I expect to have from renting out the property with a good idea of what I'm going to earn in rental income," Walker says.

If you have about 20% more in a monthly payment coming from rental income, you have a nice profit cushion, he says.

Places where you tend to find these opportunities are in the Midwest markets like Cleveland, Cincinnati, Kansas City or Dallas, Walker says.


Industrial Properties

Industrial rentals, which generally consist of large-scale properties used for storage, warehousing, manufacturing or distribution may be a thriving investment in the new year. The e-commerce boom that took effect this year, caused by people spending considerable time in their homes, is lining up to continue in 2021. This trend requires companies to house their products in real estate that facilitates easy distribution.

Industrial real estate has certain property characteristics. Eric Maribojoc, director of the Center for Real Estate Entrepreneurship at George Mason's School of Business, says, "These facilities will need to be close to population centers with easy access to major highways. They will need to be in neighborhoods that can tolerate a lot of truck traffic and with a workforce available for warehouse and fulfillment operations."


Takeaway

Real estate investing can be a rewarding long-term investment. Despite challenging market conditions, there are real estate investment opportunities in either residential single-family rental properties, multifamily commercial properties, industrial real estate as well as vacant land that you can consider