What are the best investment strategies for thriving through the chaotic times we’re living through?
2020 proved to be one of the best years on record for many investors. Wealth grew at a phenomenal double digit and even triple digit rate during the first year of the lockdowns for many sophisticated investors.
While many are still grappling with the daily feed of chaos, from lockdowns to politics and more, others are not just surviving, but thriving financially and enjoying new lifestyles and ways to load their digital wallets.
We’ve seen many celebrities, fashion moguls, and iconic CEOs lean more on real estate for protecting their wealth and growing their incomes over the past year, and it remains one of the most accessible asset classes for all.
In spite of, or because of all the chaos, we have never before seen such great balance between supply and demand and a marketplace full of both motivated sellers and buyers. So, what are the best strategies for engaging in this asset class now?
Some of those you may want to consider and add to your portfolio this year include the following.
Single Family Homes
Done at scale with professional operational expertise, single family homes, small 1-4 unit multifamily properties and portfolios of these properties can be attractive investments in the current market. The number of late mortgage payments and defaulting home loans in 2020 may have well surpassed the peak of 2008. At the same time, demand for larger homes, and homes with outdoor space has soared, along with prices.
Apartment & Townhouse Complexes
As of the third quarter of 2020, loan defaults on multifamily properties were still incredibly low. Even with everything that has happened, they have proven to be great long-term investments. Still, some landlords are tired of repairs or making sense of leasing during these times. This is a great opportunity to acquire properties in ripe areas, make improvements, and maximize occupancy at great rates.
Not everyone can afford a single-family home in the suburbs or their own ranch. Especially not with retail mortgage lenders facing challenges and pulling back on credit for home buyers. Expect far more households to join the ranks of renters in the next couple of years.
Failed Building Projects
While in many ways the US housing market seems stronger than ever, not all builders were prepared for this. Especially those building ill-fitting developments in the hardest hit cities. Banks they may have been counting on for more money are facing their own challenges with liquidity. Stepping in to finish these projects, adjust them to the market and deliver them can create great wins for all involved.
How will you invest this month?