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Investor Insights Blog|5 Trends to Look for in Real Estate Investing in 2019

Real Estate

5 Trends to Look for in Real Estate Investing in 2019

While it is her job to be optimistic about the state of real estate investing, Rebecca McLean believes her industry research backs up her sentiment.

Rebecca, the Executive Director of the National Real Estate Investors Association (National REIA), shared her research into the state of the real estate industry during her keynote presentation at Equity Trust’s recent Wealth Building Summit.

She shared that individual investors continue to make up a large share of the real estate investment market, and that number continues to increase.

Rebecca provided several takeaways about how the real estate industry might take shape in 2019, including these five points:

1. You can’t ignore Millennials

Millennials make up 68 percent of first-time buyers, according to the Federal Housing Administration (FHA). This is worth noting because research shows they shop for housing differently and value different amenities than previous generations, Rebecca said.

Trends involving Millennial house hunters, provided by the FHA, include:

  • They want more space – not necessarily for children but for pets and belongings
  • They’re increasingly moving to the suburbs – 49 percent seek a place in the suburbs, compared to 21 percent looking to buy in an urban setting
  • 50 percent of millennials want to be able to walk to shops and restaurants from home

2. Consider the unique housing needs of seniors

Another growing demographic among buyers and renters is the senior citizen population. The U.S. Census Bureau projects that by 2035, older adults will outnumber children for the first time in history.

Investors may want to consider making investment properties more senior-friendly with amenities such as grab bars in restrooms and first-floor bedrooms, Rebecca said.

3. Starter homes becoming more scarce

More homeowners are choosing to stay in their houses longer, according to the U.S. Census Bureau, which means that fewer starter homes are coming onto the market.

Do your due diligence, pay attention and ride this beautiful wave while we can. It’s a great time to be where we are and it’s a great time to be in the self-directed IRA industry because the opportunities are so great.

Rebecca McLean

4. Seek larger trends when choosing where to invest

Rebecca suggested that real estate investors do their own research into an area before buying a property – especially for out-of-town investments.

Research should include the employment rate in that area, and several other factors such as the likelihood of a natural disaster and the number and type of crimes committed

5. Foreclosures are on the decline

Foreclosures have sharply declined throughout the country compared to the Great Recession. The foreclosure rate was .51 percent in 2017 compared to 2.23 percent in 2010, according to Attom Data Solutions. Rebecca concluded that real estate investors can be optimistic about the industry in 2019, but not blindly so.

1

Can my IRA purchase real estate that I currently own?

No. This is considered a prohibited transaction (see IRC 4975). You may not purchase a property, or interest in a property, that’s currently owned by a disqualified person, which includes yourself.

2

Am I restricted to only purchasing residential property with my IRA?

You are not limited to residential real estate. Your IRA can hold various investment properties such as commercial buildings, vacant land, condominiums, mobile homes and apartment buildings, in addition to residential property.

3

Can my IRA purchase real estate that my corporation, partnership or LLC owns?

No. This is considered a prohibited transaction (see IRC 4975).

Opinions or ideas expressed by Rebecca McLean are not necessarily those of Equity Trust Company nor do they reflect their views or endorsement. These materials are for informational purposes only. Equity Trust Company, and their affiliates, representatives and officers do not provide legal or tax advice. Investing involves risk, including possible loss of principal.


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