Top Real Estate Trends for 2020
Well, hello … 2020!
It’s a new year and a new decade … and it’s a TERRIFIC time to talk about the top trends in real estate investing.
Many factors are affecting the path real estate is heading down this year … demographics, economics, technology, politics, energy, and interest rates.
So sit back and take note … these are the top trends in real estate in 2020.
In this episode of The Real Estate Guys™ show, hear from:
- Your trending host, Robert Helms
- His trendy co-host, Russell Gray
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Trends in single family homes
Today we’re going to focus on some of the top trends that experts are predicting for 2020 in real estate.
Real estate markets are diverse and always changing. On the demand side, the way that people interact and use real estate is essentially the same … but nuances change and create opportunities for investors.
On the supply side … we have whatever we have built at this moment and the plans that developers and builders have to put more inventory into the ground.
When it comes to real estate, you’re always looking at supply and demand and the flow of people and money.
Let’s start with Realtor.com and its housing market predictions for 2020. Remember that these predictions have to do with single family homes.
The National Association of Realtors is calling a 4.8 percent growth in home prices and a 1.8 percent decrease in existing home sales.
That’s a modest growth in price and less sales for a variety of reasons.
If we stopped right there, you might say that it doesn’t sound like a great real estate market to be in … BUT we’re not stopping there.
To us, these predictions mean that most of the opportunities are going to come in niches .. and we’ll dive into that later.
But keeping with the big picture, nobody is predicting a huge rise in interest rates … they’ll probably stay consistent. And overall, mortgage rates will remain low.
That’s good for a couple of reasons.
Obviously, to acquire property with leverage, you’d like to see a low interest rate. And if you already have a property with higher interest rates, your properties have better profiles today.
The National Association of Realtors (NAR) also ranks markets that they see as having a potential increase in growth … both in sales and in price.
The number one market that they chose only has 0.3 percent growth in sales projected … but 8.1 percent projected in price growth.
That market is Boise, Idaho.
Other markets that made the top 10 include Tucson, Arizona; Columbia, South Carolina; Colorado Springs, Colorado; and Memphis, Tennessee.
Along with growing markets, the NAR predicts which markets will decline in both sales prices and number of sales.
Those markets include Chicago, Dallas, Las Vegas, Miami, and San Francisco.
The NAR said that the offset of the decrease in demand in some areas is that there will be new housing starts.
In fact, according to Fannie Mae’s economic and strategic research group, new home starts will jump from a 1 percent increase in 2019 to nearly 10 percent in 2020.
Niches that make sense
One trend that we have been talking about for some time is senior housing.
The demographics are undeniable … look at how powerful the baby boomer generation is moving through all phases of their economic life … and now they’re entering their senior season.
Anything related to seniors is going to probably be pretty solid for the next couple of decades.
You hit a season of life where you need some special assistance and accommodations.
There are lots of places to play … from the 55 and older communities to assisted living and residential assisted living to skilled nursing and memory care facilities.
There is demand here that will be exceeding supply … and you don’t have to be a rocket scientist to recognize the signs.
The next niche has some overlap when it comes to seniors … and that’s multifamily.
Multifamily has been huge in terms of demand for many years, and that’s been both good and bad … the bad part is that we’ve had a lot of money chasing a particular set of increasing assets.
There has been a demand for multifamily on the tenant side and on the investor side … and on the investor side, the demand has meant a decrease in return.
For 2020, we anticipate growth to be in the niches within multifamily .. like 55 and over apartment campuses or millennials looking for micro apartments.
Micro apartments are small apartments that cater to younger tenants … usually fairly affordable … in city centers with unique amenities like shared workspaces.
Another great trend … and one of our favorite niches … is resort property.
This is a wide niche … but we tend to like the higher end as opposed to spring break on the cheap.
It’s hard to go out and buy a 400 room hotel … but there are other ways that people are investing in resort properties.
Some will allow you to own an individual unit that operates as part of a big resort or a hotel. There’s also the segment of vacation rentals in condos or single family homes.
Not your cup of tea? Maybe take a look at agriculture instead.
There are so many opportunities to come alongside successful operators in this space and invest offshore.
The great thing about agriculture is that the underlying industry is probably not going anywhere … every human and animal needs to eat.
The population is growing … and we are going to need more food.
Take care with trends
Looking for real estate investment trends can reveal great opportunities.
The only caveat … and this is true of any property that is use or trend specific … is that if that trend or use changes, it can be hard to repurpose.
Anytime you are investing in a trend, you want to make sure it’s a trend that has some longevity to it.
And remember that anytime a niche gets hot … it gets CROWDED. So, the earlier you adopt it, the better.
For on 2020 real estate trends … listen in to the full episode!
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The world has gone MAD …
In case you haven’t noticed, there’s a LOT going on in the world as we sail into a brand new investing decade …
In addition to wars and rumors of wars, a growing number of notable people are publicly expressing concerns …
… not just about the economy and financial markets, but the system itself.
Perhaps the most notable is Ray Dalio of Bridgewater Associates, the largest hedge fund in the world.
In a recent article, Dalio warns …
“The World has Gone Mad and the System is Broken”
Dalio’s essential thesis is the system of free money has created a series of negative trends that will eventually converge into a fundamental and epic re-set.
“This set of circumstances is unsustainable and certainly can no longer be pushed as it has been pushed since 2008. That is why I believe that the world is approaching a big paradigm shift.”
Of course, just because he’s successful doesn’t mean he’s right. But Dalio is certainly well-qualified to have an opinion worth paying attention to.
But as we’ve learned from studying smart people, understanding what they’re saying takes some time and effort.
We think it’s worth it. Because any “big paradigm shift” involving the financial system affects EVERYONE … including lowly Main Street real estate investors.
If you’re new to this discussion, consider making a modest investment of time and money to watch our Future of Money and Wealth presentation, “The Dollar Under Attack”. It’s helped a lot of real estate investors see a bigger picture.
It’s important to understand the difference between the “economy” (activity) and the “system” (the structure supporting the activity … including currency, banks, credit, and bond markets).
Remember, the economy was humming along leading into 2008 … booming, in fact. But the system was faulty under the hood, and ultimately broke down.
Just like a car, the economy can go faster or slower … but only while it’s mechanically sound.
If the vehicle’s systems fail, then the car is incapable of speed … and may not even run at all.
Then, when the car breaks down, your skill as a driver is meaningless, except perhaps for avoiding catastrophe when it happens.
In all cases, you end up on the side of the road going nowhere.
The same is true with the financial system and your skill as an investor. If the financial system fails, it can sideline a lot of people … including you.
Of course, the financial system, like a car, has gauges … indicators of performance, health, or impending failure.
But not all gauges are easily seen. And reading them requires education.
That’s why we hang out with smart people like Chris Martenson, Peter Schiff, Brien Lundin. G. Edward Griffin, and Robert Kiyosaki.
Even better, each of these guys are connected to lots of other smart people like Danielle DiMartino Booth, Mike Maloney, Grant Williams … and many more.
You may not yet be familiar with some of these names. Except for Kiyosaki, none of them are serious real estate investors … and that’s GOOD.
As we learned (the hard way) in 2008, when you live in an echo chamber of people who all hope … even need … the economy and financial system to be functional …
… there’s a tendency to ignore or discount even the most obvious problems.
As Upton Sinclair said …
“It is difficult to get a man to understand something when his salary depends on his not understanding it.”
There were warning signs leading up to 2008. Peter Schiff and Robert Kiyosaki both saw them and publicly warned people. Very few listened.
Unsurprisingly, both Schiff and Kiyosaki stopped getting invited on to mainstream financial shows. Wall Street’s not likely to advertise on programs outing a failing system.
And people making millions in the mortgage business weren’t interested in hearing how the mortgage markets were about to implode. Ditto for real estate, stocks, and bonds.
However, smart investors are wise to look beyond their own normalcy bias and the filtered news which is produced by people whose livelihood depends on a rosy narrative.
Risks are ever-present … and the worst are those you don’t see coming.
But before you go full fetal freak out, we’re NOT saying the end of the world is nigh. After all …
“A bend in the road isn’t the end of the road … unless you fail to make the turn.”
Helen Keller
But if Dalio and others are correct, then there’s more than a reasonable probability of substantial changes to the financial environment we’re all operating in … then it’s worth preparing for.
After all, it’s better to be prepared and not have a crisis, then have a crisis and not be prepared.
Remember … ignoring risk isn’t optimism, it’s foolishness.
Legendary real estate investor Sam Zell says one of his greatest assets is the ability to see risk and move forward. You can’t navigate a hazard you don’t see.
So what are some things our smart friends are watching heading into 2020?
Gold, oil, debt, the Fed’s balance sheet, bonds, and interest rates.
These are like the dashboard gauges for the health of the financial system.
Right now, at least three are blinking red … gold, debt and the Fed’s balance sheet.
It’s also important to note that those three are also leading indicators for bonds and interest rates.
That’s because if the world loses faith in the dollar, they won’t buy U.S. debt, which is growing at a staggering rate.
In spite of all their bickering, Congress and the White House manage to agree to big time spending.
And if the world loses its appetite for U.S. debt, then either interest rates rise (something which directly affects nearly all real estate investors) …
… or the Fed needs to buy up the new debt with freshly printed money. This is called “monetizing the debt” … and would show up on the Fed’s balance sheet.
Some say this “monetization” could lead to hyper-inflation. Others think it means the U.S. could go into decades-long stagnation like Japan.
Maybe.
The difference is Japan doesn’t issue the world’s reserve currency and enjoys a friendly relationship with the country that does (the United States).
So we’d say the United States situation isn’t exactly the same as Japan. But what do we know? We’re just two dudes with microphones.
Maybe there are clues in the news …
The world’s super-rich are hoarding physical gold
Yahoo Finance, 12/10/19
Hmmmm … it seems the “fear” trade … those looking to park wealth someplace “safe” are choosing gold … in addition to, or instead of U.S. Treasuries.
If instead of Treasuries, you’d expect interest rates to rise as bond prices fall due to less bidding.
But while there’s currently only a little upward pressure on rates, it’s not much … so someone must be buying them. Chris Martenson says it’s the Fed.
In other words, the Fed might be starting to monetize the debt.
So it’s notable the “super-rich” are following the lead of the world’s central banks in acquiring gold. No surprise, as of this writing, that gold is trading at a 7-year high.
In other words, if Chris Martenson is right, everyone (except the Fed) would rather own gold than U.S. debt denominated in U.S. dollars.
But we know Uncle Sam can’t default. The US can print an unlimited number of dollars. So no one is avoiding Treasuries because they don’t think they’ll get paid back.
The concern must be the value of what they’ll get paid back with … the dollar.
Think about your paradigm of wealth. Do you denominate wealth in U.S. dollars? Are you ready for a “big paradigm shift”?
Buckle up.
The new decade should be an exciting ride … scary and dangerous for those not strapped in with the right education, information, portfolio structure, and tribe.
Education, preparation, and tribe have never been more important. If you’re not seriously investing in those things, perhaps now is the time to start.
Meanwhile, we’re bullish on Main Street.
We think real people who do real work and own real assets will fare much better than those counting on paper promises from Wall Street, bankers, politicians, and pensions.
If you’re a fan of real estate and other real assets, you’re already on the right track. Now it’s time to take it to the next level.
Getting Off to a Great Start in the New Year
The start of a brand-new year is a great time to reflect on lessons learned and make bold plans for the future.
It doesn’t matter if you’re just starting out or starting over … the possibilities are endless!
We’re sharing practical tips for getting off to a great start in this new year … and new decade.
In this episode of The Real Estate Guys™ show, hear from:
- Your practical host, Robert Helms
- His practical joker co-host, Russell Gray
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Broadcasting since 1997 with over 300 episodes on iTunes!
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Vision, Mission, and Values
For our last show of the decade, we’re going to talk about how you can gear up and prosper in a brand-new year.
When you have clarity of vision, strategy and tactics become evident.
We all want to know how to make money in real estate … but sometimes the true vision isn’t that clear.
It’s a great time in history to be thinking about clarity of vision because we’re entering 2020 … and we all want to see with 2020 vision.
So, today we are talking about how you can figure out how to go from where you are to where you want to go. It starts with getting a vision in your mind of what success looks like for you.
Anytime we have a challenge or an uncertainty, we sit down and ask ourselves … what is the vision? What are we trying to accomplish? What is the why?
You only have so much. You only have so much energy. You only have so many resources. You only have so much focus … so you need to know what to say yes to AND what to say no to.
If you can get a clear vision … and articulate that vision to other people … then everyone knows what they need to do without micromanaging.
On the other hand … if you lay the ladder of success against the wrong building, you’re going to get to the top, look around, and realize you are in the wrong place.
Your vision isn’t peripheral to your investing … It’s fundamental. It’s the foundation of everything you do.
Vision, mission, and values are three different things … but together they can really chart your course.
As we said before, vision is what success looks like in very clear terms. Mission isn’t about what success looks like … it’s the why behind what you do.
Mission is the reason what you are doing matters.
The best missions … in our experience … are those that are about making a difference for the better.
This could be with your community, or for a spouse, for your children, for your friends, for your employees … if you get up every day and are motivated to support someone else and make the world better … that’s a mission.
Values are really about the methodologies … what you’re willing to do and what you are not willing to do.
A great exercise is to sit down and come up with the six top values in your life … the things that really matter to you in life.
Stephen Covey says that highly effective people begin with the end in mind … all of these things help you do that.
Today, we’re going to give you some tools that you can use to actually get to where you want to go.
Start, Stop, Continue
One of our favorite tools is what we call Start, Stop, Continue.
Simply put … at the end of the year, you step back and look at the year and see everything you’ve done and ask, “What are the things that I should continue doing?”
This could be a particular area, market, or partner that has served you well.
Then, you have to ask, “What are the things that I need to stop?” Maybe it’s the way you spend your time or a personal or business partnership. Maybe it’s a market that you need to get out of.
After you have decided what will continue and what will stop, it’s time to ask, “What should I start doing?”
These could be new habits, new beliefs, new partnerships, new markets, new product types, new activities, or new people.
This is an exercise that requires you take time, sit down, and confront the brutal facts.
There may be things you are doing every week that aren’t serving you well … and these aren’t necessarily bad things.
Sometimes you have to say no to the good in order to say yes to the great.
If you’re busy … like most successful people are … you don’t have a lot of extra time. So, you have to make room in your schedule either through delegation or by removing items from your docket.
You can’t really create more time … but you can leverage time.
Once you have determined how to bring more good energy into your life, you need to create a productive structure to get it done.
Then, you establish clear goals, strategies, and action plans because you can allocate them into the structure.
Zero-based Thinking
The next tool in our arsenal is something we learned from Brian Tracy many years ago. It’s called zero-based thinking.
The question you ask yourself is, “Knowing what I know now, what would I do differently?”
Knowing what I know now would I get into this relationship? Knowing what I know now would I get into this particular deal? Knowing what I know now would I get into this marketplace?
And if the answer to any of those things is “no,” now is the time to change your course.
Maybe your accountant isn’t that great … but they’ve been your accountant for so long you just haven’t ever really considered leaving. Now may be the time.
Sometimes what you find yourself looking at is a personal relationship. If there are people in your life that don’t affect you in a positive way, it’s time to cut ties.
Zero-based thinking only works if you are willing to be brutally honest with yourself. You have to admit your mistakes.
But if you can, you can set yourself up for your best year yet.
For more tools for getting off to a great start … listen in to the full episode!
More From The Real Estate Guys™…
- Sign up for The Real Estate Guys™ Free Newsletter
- Check out all the great free info in our Special Reports library.
- Don’t miss an episode of The Real Estate Guys™ radio show. Subscribe on iTunes or Android or YouTube!
- Stay connected with The Real Estate Guys™ on Facebook, and our Feedback page.
The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.
Love the show? Tell the world! When you promote the show, you help us attract more great guests for your listening pleasure!
Podcast: Top Real Estate Trends for 2020
Turning the page to a new year and a new decade is a terrific time to talk about some of the top trends in real estate investing.
Demographics, economics, technology, politics, energy and interest rates are all key factors affecting the trajectory of real estate heading into the 2020s.
So listen in as The Real Estate Guys™ talk top trends in real estate for 2020!
More From The Real Estate Guys™…
- Sign up for The Real Estate Guys™ Free Newsletter
- Check out all the great free info in our Special Reports library.
- Don’t miss an episode of The Real Estate Guys™ radio show. Subscribe on iTunes or Android or YouTube!
- Stay connected with The Real Estate Guys™ on Facebook and our Feedback page.
The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.
Love the show? Tell the world! When you promote the show, you help us attract more great guests for your listening pleasure!
Low Vacancy and No Deferred Maintenance with Build to Rent
Vacancy is the enemy of real estate investment. But no fear!
You can invest in a property with zero deferred maintenance and a whole lot of attraction to tenants.
Smart builders are helping real estate investors dramatically reduce the risk of vacancy and expensive repairs.
Listen in as we chat with a man who is creating build to rent properties in some of the best rental markets in the United States … and see what opportunities await investors like YOU.
In this episode of The Real Estate Guys™ show, hear from:
- Your helpful host, Robert Helms
- His deferring co-host, Russell Gray
- From Fourplex Investment Group, Steve Olson
Listen
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Broadcasting since 1997 with over 300 episodes on iTunes!
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Discover build to rent
Today we’re going to talk about an interesting niche within real estate.
More and more, we’re seeing builders who don’t build property to sell to an owner occupant … they’re selling to investors instead.
It’s called build to rent.
With millennials fighting student debt and not forming households or buying property as soon in their life, it’s a great time to get into the rental game.
We’ve dabbled in this niche ourselves … though it wasn’t firmly established at the time.
We’d catch a builder in a phase of development and say, “What if we came in and bought the rest of your inventory?”
It was a real win-win. The developer no longer had to question which properties would sell … and investors could get inventory that they otherwise wouldn’t.
The tenants benefitted too. They got to move into these brand new, beautiful properties.
As the niche has grown, it has only become better.
Now, you have builders building with the landlord and the tenant in mind … which means you can do some value engineering that maybe you wouldn’t do if you were selling to owner occupants.
All of this means bringing product at a more competitive price … which means a better ROI.
Our guest today is Steve Olson of Fourplex Investment Group (FIG). FIG builds brand new fourplexes in a variety of markets … ready for investors to swoop in and swoop up profits.
Creating a valuable niche
The days of buying a home for less than it costs to build are gone. In many cases, developers, builders, and investors are finding that it’s more economically viable to just build new.
If you want to be in the investment property business … you’ve got to find somewhere to get inventory … and you have to look at shifts in the marketplace.
Two major demographic shifts are happening.
One, baby boomers are looking for something more convenient … a managed community with some amenities to it.
Two, millennials are more likely to rent than to buy … homeownership is getting more expensive, and many of them have a distaste for it.
So, people want to live in these build to rent properties … you just have to pick the right markets.
“More importantly, I think, you need to pick the right sub-markets within those solid markets. You’ve got to get to know the neighborhoods,” Steve says.
And when you are building to rent, you’ve got to be able to look out at the horizon and be confident that there will be tenants in the area in 18 months … or more … however long it takes to get property standing.
Steve and the team at FIG build brand new fourplex units … beautiful homes that are attached and have parking.
They are an upscale rental … built in communities that allow them to offer amenities and services.
“The idea is that we have to balance two worlds. We have a bunch of different investors but the feeling of a cohesive community. We do this by creating uniform standards through an HOA,” Steve says.
As far as the tenant knows, they’re in a townhome complex or apartment complex. They have amenities. There is a property manager they report to … the same experience across the board.
HOAs aren’t always popular … but that’s usually because homeowners are too busy to be bothered to come to meetings and be involved.
Investors aren’t like that.
Owners that are investors are very interested in the long-term health and viability of the complex.
This type of investment is especially suited for someone who thinks a little more long term. The average investor doesn’t come in, buy a fourplex, and flip it to another guy in a year.
With FIG’s approach, there is a certain amount of value engineering that can take place.
“We deliver units cheaper than almost anybody I know of, but you have to strike a balance so you aren’t paying for it down the line,” Steve says.
For example, Steve and his team have started using as a standard luxury vinyl tile floor … it’s meant to take a beating.
“It looks good, like wood, but you can drag a couch across it. The dog can run around on it, and it’s still going to last a long time,” Steve says.
But everything else is meaningless if you don’t talk about markets.
The right markets for fourplex investment
A market is where we find tenants … so Steve and the team at FIG are very conscious of the markets they choose to build in.
“Strategically, we’re looking for population growth. We’re looking for employment. You can get past a lot of things if you have those two things,” Steve says.
FIG started in Utah in the Salt Lake City metro. Then, they expanded into markets in the Houston metro and into Boise, Idaho.
Boise has tons of growth with jobs coming in from the Northwest and other less business-friendly states … and the vacancy is really low across the board.
The team is also moving into the Phoenix metro area.
For more information on this investment niche, listen in to the full episode!
More From The Real Estate Guys™…
- Sign up for The Real Estate Guys™ Free Newsletter
- Check out all the great free info in our Special Reports library.
- Don’t miss an episode of The Real Estate Guys™ radio show. Subscribe on iTunes or Android or YouTube!
- Stay connected with The Real Estate Guys™ on Facebook, and our Feedback page.
The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.
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