For-sale homes are in short supply. According to the Census Bureau, as of September 2020, the nation currently has just a 3.6-month supply of properties -- the third-lowest point on record. The shortage has caused problems for buyers and investors alike, sending prices upward and bidding wars skyrocketing. And the pandemic hasn't helped things either.
Are you currently on the hunt for your next investment? Having a hard time finding a property, particularly at a price you can afford (and make money off of)? Here are five strategies you might consider.
1. Look into new markets -- possibly outside the country
There's a nationwide supply shortage, but as we all know, real estate is local. Not every market is low on inventory, and in some areas, you might even find a buyer's market. It all comes down to good old research and a solid market analysis.
If you're feeling adventurous, you might even consider investing in properties outside the U.S. or in territories like Puerto Rico or the Virgin Islands. Just make sure you talk to on-the-ground resources like local real estate agents (or visit the area yourself) before making any moves.
2. Consider alternative property types
Supply is low on single-family homes, but multifamily properties and commercial real estate are still widely available. If you're having a hard time finding new rental properties or homes to fix and flip, study a new strategy and think about expanding into new property types. Our roundups of the best books on multifamily investing and commercial real estate can help you get started.
3. Get creative
If you're not already, start looking outside the MLS. Check FSBO websites, Craigslist, and Facebook (NASDAQ: FB), and watch for default and divorce notices in the local newspaper. These can all offer potential inroads to properties in your area. Driving for dollars is another option if you're looking for a flip.
4. Venture outside physical assets
Buying property isn't the only way to invest in real estate or make money off it. If properties are in short supply, consider investing in real estate investment trusts (REITs) or real estate stocks instead. You could even try a crowdfunded deal through Fundrise or another similar platform.
5. Consider taking a break
As long as you're in a good place financially, with consistent income and able to stay current on bills, taking a break from new investments might be a smart idea until the market improves. Buying a property just to buy one is never smart or a good use of your hard-earned dollars. You're better off waiting for the right deal than just settling for what's out there.
The Millionacres bottom line
Inventory is at record lows, and your next big investment might take awhile to find. In the meantime, consider venturing outside your comfort zone into REITs, stocks, or new property types, or look into other markets or locations. If none of those seems like a valid option, use this time to take a break, restrategize, and gear up for an even stronger business come 2021.