If a recent survey of real estate investors is any indication, 2021 is going to be a year of opportunity zones, multifamily, built-for-rent, and medical property investing.
What won’t be on the agenda? Retail (surprise) or office investments (even less of a surprise). Hotels and hospitality properties are also low on the list.
At least that’s what more than 1,000 real-life investors hinted at in a recent RealtyMogul survey conducted earlier this year.
Have you determined what types of real estate you’re going to invest in this year? Let’s dive into what other investors have on their agenda.
Top real estate sectors
When asked what sector represents the strongest buying opportunity this year, investors chose multifamily by quite a margin. It’s a little surprising with rent prices starting to even out and vacancies holding steady over the year. Permits are also on the up-and-up in this arena, so more supply should be hitting the market soon.
Right behind multifamily were single-family, built-for-rent investments. Built-for-rent has been gaining steam lately, especially as the affordable housing crisis has worsened. Investors don’t even need physical properties to participate in the boom either (built-to-rent REITs and stocks in BTR-dabbling builders like Lennar and Meritage are also options.)
Medical investments came in at third for investors, but just barely. Warehouses and industrial properties weren’t too far behind.
What won’t be hot
The pandemic’s influence is glaring when you look at the bottom half of investors’ lists.
Retail? Pummeled by the pandemic. Office space? That was hit even worse. (Manhattan office vacancies are currently at their highest point in three decades.)
Hotels and hospital purchases are also low in opportunity, according to the investors RealtyMogul surveyed. This one’s not too surprising either, considering the damage dealt to the travel industry over the past year.
Opportunities in opportunity zones
Investors are apparently eyeing opportunity zone investing, too. Over 40% said they’re looking to invest in OZs this year (though nearly one in five doesn’t know what opportunity zones are, surprisingly).
Despite this, it’s a topic that’s on many investors’ minds these days, especially with the House considering the Opportunity Zones Extension Act. The legislation would extend the program another two years -- until 2028.
The word is still out on that legislation, but according to our own Matt Frankel, 2021 may be the year "when the program begins to gain significant traction." Only time will tell.
The bottom line
The pandemic has undoubtedly shifted investors’ focus in the last year, but it’s likely not done yet. As vaccines become more widely spread and the economy (and travel) opens up, perspective could change, so stay tuned to Millionacres for the latest insights.