Another year is coming to an end, and before we even know it, 2021 will be right before our very eyes. Looking back, this year has been a great challenge for everyone. From the COVID-19 pandemic to the inevitable economic crisis, no one could have predicted the unfortunate events that significantly impacted humanity without exception. Some people lost their jobs, some lost their business, and some even lost their loved ones. But whether you lost something this year or not, the fact that we all need to get back on our feet in no time still stands.
As we prepare to set on for the upcoming year, we should also be looking at our plans to leverage our resources to stay on top of things. What should you be doing in 2021 that will be of use to diversify your portfolio while you build your equity as we fast-approach 2021? The answer is investing in lands and properties. Aside from it being one of the best investments you can make, it can also help you get ready for unforeseen changes in the economy and depend on steady and passive income. We could even list down a great deal of benefits when it comes to real estate investing, such as long term financial security, appreciating assets, tax benefits, inflation hedge, and so on.
Still haven’t decided on what and where exactly to invest? You could start first by asking yourself: what is my end goal? Are you investing with cash flow in mind? Are you in it for a reliable income despite the unpredictability of the economy or another downturn in the market, or do you want to run something for the long term that is slow and steady? Your answers to these questions will determine what you should most likely invest in that fits your goal.
Let’s start with the fact that everyone loves going on vacation. It doesn’t matter, even if it’s only for just a day or two of relaxation. People would grab that chance to unwind. The ideal place to invest in is the destination spots, the states that are undoubtedly in the tourists’ eyes. It is a plus point if your property is in a large metro area. Whether it is a luxurious 5-bedroom house that you don’t stay in all the time or a cozy apartment or condominium, you can search to be sure, list it and have it rented out.
Just as how tourists occupy hotspot areas, most people would also prefer living in these big cities. This is mainly because of the job offers, educational opportunities, and greater lifestyle the major metro could give. Given that we are still in the middle of a pandemic and some, if not most, people are still in the process of recovering from their loss, it’s not a shock if people would have to move places due to financial reasons. Once tenants begin to have problems paying for their rent, it creates a snowball effect wherein the landlord’s financial obligations might highly likely be affected. If people cannot afford the rent in the big cities anymore, where would they prefer to settle? Apart from hotspot areas, you could also consider those states where people would settle in for a reasonable price.
Besides these residential structures, you can also look at having commercial properties that you could lease out as office buildings for companies and small business owners. If your eyes are set on investing for cash-flow purposes, both residential and commercial properties are what fits most for your goal. Considering how the market fluctuates, there are also chances to have your rates to increase over time as long as everything is in place, and agreements are all settled accordingly.
Another investment that can get you high and stable returns are agricultural lands. These are called farmlands, where crops or livestock grows. These returns can either come in annually as cash returns or increase in the market value. It is quite certain that agriculture won’t go anywhere anytime soon, so this for sure has low-risk and is a wise alternative investment. According to the 2017 agriculture census from the U.S. Department of Agriculture (USDA), there are around 900 million acres of farmland across the country, and 40% of this is rented from others.
Still can’t put the finger on which state to consider in placing your investments? We’ll have you a few picks you can look into.
First on our list is Arizona, which is well-known for its geography and great weather. The sixth-largest state in the U.S. is full of breathtaking landscapes full of forests, mountain ranges, and canyons, which is excellent for short-term vacations. In 2019, Arizona had a healthy housing market because of its growing economy and reasonably priced housing. However, with the pandemic, their economic suffering was unsurprising as well. But worry not because, according to economists, Arizona is coping well and situated to recover faster than other states. So, is Arizona a yay when it comes to residential structures? Definitely!
Cities to consider: Guadalupe, Sierra Vista, Sahuarita, Page, Tucson, Apache Junction, Phoenix
The sunshine state lifestyle, where the cost of living is low, healthcare is outstanding, and taxes range from low to none. Even though Florida isn’t on the top when it comes to land area, it is still considered to be one of the most populated places in the U.S. As the state’s population continues to grow, it has come to be a state that is fit for all ages. Amid the COVID-19 pandemic and large population, their unemployment rate dropped to 6.5% as of October 2020. Given that investment property is also thriving in this economy, it generates an exceptional return and a positive cash flow you are probably aiming for. Once you find the best location this state could offer, there’s a high chance to find affordable investment properties as well.
Cities to consider: Cutler Bay, Greenacres, Maitland, Tampa, Orlando, Jacksonville, Greater Atlanta
California, also called The Golden State, occupied by not lower than 12% of the U.S. population, ranked as the fifth-biggest economy globally at $3.1 trillion in 2019, and second to the most headquartered state for the Fortune 500 in 2020. The state’s economic base diversified over time that resulted in generous job offers from having the technology and entertainment fields. Since there’s an increase in house prices in California due to the high demand for property buying, it may scare off potential investors. However, keep in mind that the property price rise is a good sign in the market as its value continuously grows. Just be patient and wise. You might find an excellent property for sale at a fair price, which could later reach its peak demand.
Cities to consider: Newport Beach, Los Angeles, San Bernardino, Santa Barbara, Solano, Sacramento
Home to tourist destinations, namely The San Antonio RiverWalk, Big Bend National Park, and The Alamo. It is also considered one of the biggest producers of agricultural products such as oil, cattle, sheep, minerals, cotton, and wool. So whether you’re looking into residential property, farmland, or both, Texas should be taken into consideration because this state surely has a lot to offer for everyone. The cost of living in this state varies depending on the city, larger cities may be higher, but there are still affordable alternatives to this. Hitting a 13% unemployment rate last May 2020 because of the pandemic outbreak, they could dip back to 6.9% in October 2020. According to economists with the American Farm Bureau Federation, agricultural land values and cash rents are stable even with the pressure on farm income and commodity prices.
Cities to consider: Surfside Beach, Waco, Dallas, Austin, Houston
They are heading to the Midwest, where they have headstrong agriculture. As mentioned before, agriculture is not going anywhere anytime soon so investing in land in the Midwest such as Nebraska is excellent. In addition to this, the state has a healthy unemployment rate of 3% as of October 2020 and did not skyrocket as other states during the COVID-19 breakout, which tells us about the economy’s spare capacity and unused resources. In addition to agricultural benefits, Nebraska, along with other states in the Midwest, can also be a considerable location for companies whose services require shipping goods and products across the country and companies who don’t need their people to be in their offices all the time. When socialization should be minimized, and some people prefer to work in the comfort of their own homes, companies might be looking for smaller spaces to settle in.
Cities to consider: Omaha, Lincoln, Scottsbluff, Papillion, York
Remember, money in real estate doesn’t depend on luck. To succeed in this industry, you must make sure to conduct proper market analysis or consult with a real estate professional before taking a huge leap, especially during your first property investment. Take into consideration important aspects such as rental demands, growth in revenue, and investability. Once you’re all set, you’ll be bringing yourself an increased revenue in no time.
Ready to kick off with investing? Comment below and let us know what you’re looking at and why!