Turn on your phone. Check the date. Does it say it's January of 2013? Good. Now take a look out the window. Did the sun come up? Sky still blue? Grass still green? Super. The world didn't end. Someone somewhere read the Mayan Calendar wrong and has a lot of explaining to do. The country didn't tumble over the fiscal cliff into oblivion and believe me, real estate investing is still an excellent bet for investment dollars. And dollars to dough nuts that somewhere right now Michael Bay is working on a summer blockbuster. (It's Ninja Turtles, and it's due out in May of next year. What? I checked IMDB. I couldn't help myself.)
In other words? The world has decided to keep turning, so you'd better be ready for 2013, and the opportunity for real estate investment may never be better.
While we're not in possession of a crystal ball, we can observe trends in the industry and plan accordingly. With that in mind, your Memphis investment professionals are here with four investment trends for 2013.
Buy-Up of Distressed Properties
Investors looking for a deal will continue to pick up properties that have been through the foreclosure process. The whole point for some buyers is to build an investment portfolio in anticipation of increased demand due to population growth. Purchasing these properties at bargain prices now could give shrewd investors more bang for their buck as demand for housing increases. But just because the property was distressed at one time, doesn't mean it needs to be distressed when it is purchased by the real estate investor. We have been working to focus investors on the ease of buying properties that have already been through a complete renovation process and, more importantly, are not sitting in a condition with deferred maintenance issues. This allows investors to really focus on a top of the line property with the highest anticipation of performance.
Increased Competition from the Big Boys
Individual investors are starting to have a lot more company in the real estate arena. There is an increase in the number of private equity firms looking to invest in residential real estate. These firms are committing large amounts of money and betting on the profitability of a recovering housing market. Is that a bad thing? I am not really of the opinion that it is as long as investors have the right connections and team on their side. In our markets, there is absolutely competition from multiple large buyers, some institutions and others simply larger private funds, but our game-plan for competing has never changed. Others may have more money, and some spend it foolishly, but no one can outwork our family and the company that we have built and the increased competition only makes us have to focus more on the basics of great real estate investing for our investors to succeed.
Property Management Will Make A Big Difference
Investment property management is not something that just any one can do and why investors ever rely on individuals or a small firm with limited resources to manage their portfolio I will never understand. If we have learned one thing over the years it is that great property management is hard work that requires constant attention and tracking. It is not simply renting a property and collecting a rent. The difference between a real estate investor who will have great success in 2013 and one who will not, may very well come down to how good the property management company performs. We have been blessed by surrounding ourselves with a great team. Even though we are managing over 1,600 properties and that number grows by 30-50, we have been able to build a process and systems that help us grow, manage, track, develop, improve and hold ourselves accountable to a level of excellence that few others can achieve. If you are buying investment property in 2013, Property Management could be the top factor in your success.
Social Media, Social Media, Social Media
Facebook. Twitter. Instagram. LinkedIn. YouTube. Flickr. Google+. ByteMarx. YammerText. Viewtyme. Okay, so I made up those last three. (It wasn't easy, either. Do you have any idea how difficult it is to create a "techie" word that isn't already an established brand?) Unless you've been dealing only in the sub-mineral-matter residential market -- that's pseudo-real-estate speak for "hiding under a rock" -- then you know how much social media has entrenched itself into our lives (not to mention how much we've entrenched ourselves in social media). Real estate has and always will be a people business, but that doesn't mean one should shy away from technology. Quite the opposite, actually. Social media allows people in every aspect of the real estate game to better connect with others, and if you're not using it, you're already behind. Whether it's advertising your properties, promoting your business with a blog, or any other of dozens of applications, look for social media to become even more of a factor in 2013. Look for Memphis Invest to make a HUGE push in 2013 with the use of Social Media as a key way for us to continue to build and develop closer relationships with our clients, future clients and our followers looking to learn from our company. This is going to be a MAJOR focus for our company in 2013.
Can you think of any other investment trends that will make 2013 notable? Leave them in the comments!