With insights from RCN Capital, real estate investment brokers can help clients evaluate emerging U.S. housing markets using appreciation, rental demand and economic fundamentals
As a real estate investment broker, making the transition from transaction coordinator to trusted advisor isn’t always easy. However, there are plenty of key areas a broker can focus on that will have a direct, positive impact on a client. Along with preferred property type and specific loan type for each deal, the location of the next investment can be an important piece of the puzzle that a broker can assist with.
Brokers can help with local portfolio additions as well as nationwide expansion if a client is open to it. There are markets in every area of the country that can provide upside for investors when they align the potential opportunities with the right timing. Important metrics worth tracking that can aid in investment decisions include housing price appreciation, population growth, job market strength or unemployment rate and vacancy rates.
Midwestern markets
The Midwest is one of the best areas in the country for an investor to try their hand at expansion. It can be low risk, high reward and presents a few different options for investing such as fix and flips and smaller multifamily. The barrier to entry is much lower, its centralized location makes it easier for investors who don’t live locally to get there, and the competition and cost per mistake is much lower when dealing with properties in the Midwest.
There are a number of very strong metrics in Midwest markets that make cities such as Buffalo, Indianapolis and Cleveland appealing options for investors looking to take that next step. As a broker, being able to communicate these metrics and provide insight on why a certain opportunity is the right one can be vital.
With a combination moderately growing populations, affordable home prices and a 5-year price appreciation no less than 28%, these markets strike a perfect balance between prospective buyers and renters, affordability and room for appreciation.
According to AmeriSave.com, “Cleveland provides investors the highest rent-to-yield ratio and best affordability of any major U.S. metro.”
In Buffalo, investors are targeting multifamily opportunities due to the increase in population and the employment workforce driving demand for affordable housing.
Indianapolis’s value comes in the form of consistency. With steady appreciation and YoY returns, investors are getting a solid ROI when entering the market and can rely on a steady uptick on all fronts for the foreseeable future.
Brokers armed with this information can now develop strategies for investor clients that are considering expansion. While there are bigger markets with higher property values available nationwide, it’s these subtle, underrated markets in the Midwest that can act as an early launching pad for investors that want to get their first taste of scaling.
Florida flourishing
Due to the countless destinations that range from major cities to smaller beach towns, Florida has always been a hot spot for real estate investing. The two markets gaining the most attention currently are Jacksonville and Orlando.
Proximity to amenities and pleasant weather all year round has never been an issue for cities in Florida, but it’s the underlying statistics that are furthering the case for investors to enter these markets. As a broker, it’s important to walk clients through more than just surface level attractions to specific markets. Equipped with the right data, a broker quickly becomes a trusted advisor for investor clients by helping them make those informed decisions rather than emotional ones.
Just a few years ago in 2022, Yahoo Finance named Jacksonville the 5th fastest growing city in the U.S. That number alone should pique the interest of real estate investors due to the increase in buyers and renters that comes with that type of growth.
In article published by JWB Real Estate Capital, the Jacksonville metro grew by more than 10% from 2019 to 2023, home prices are roughly 10-15% below the national average. Another strong combination that breeds countless opportunities for real estate investors. There are also a multitude of different neighborhoods in the Jacksonville area, allowing for investors with different price points to enter the market and still be successful.
The opportunities in Orlando can be summed up in one word: diversification. The possibilities are endless in Orlando and a lot of that centers around what Disney can provide. There are long-term rental options for employees while millions of tourists head to Disney every year and investors with short-term rentals (Airbnb & Vrbo) can benefit immensely from having their property filled with guests year round. According to rentcafe.com, 60% of the population in Orlando rents, leading to that passive income opportunity for investors.
These are the types of data and numbers that generate informed, profitable decisions, and a broker can relay that to an investor client and become the driving force for some of the best decisions they’ll make in real estate investing.
Finder’s fee
With multiple opportunities across the country in addition to the Midwest and Florida markets, brokers have the ability to make an impact every day and work alongside investor clients to experience success. Knowing what trends to look for and what the data is saying is the first step, but from there, a broker and an investor can be an unstoppable force in the industry. Investing in new markets and scaling a portfolio always comes with risk, but there are ways to mitigate those risks by staying informed.
Sound choices by educated investors have a snowball effect in a positive way and can lead to years of success. Be the broker that educates these clients and achieve success together.
This article was provided by RCN
