Real estate is virtually always considered a lucrative way to invest for the long term. Because of the investor’s stellar gains, many more people are working to get in on the action. Investors must stay one step ahead of their competition as this crowd grows.

The race may have slowed (slightly) while interest rates grew. But now that rates have fallen, the investor market is heating up again.

If you are a real estate investor or just considering the possibilities, you’ll want to focus on the market’s future. Here are four crucial trends to get ahead of the best opportunities.

1. Affordable Housing is a Hot-Button Issue

The lack of affordable housing is undeniable. However, it can also be an opportunity for real estate investors. You just need to put your money in the right place.

The demand is there, but traditional single and multi-family homes aren’t. Affordable housing is more resilient in fluctuating economies, making investing in this sector less risky and far more stable.

Affordable housing demand has bolstered the popularity of manufactured housing. While many investors raise their eyebrows at the idea of sinking money into this type of real estate, those who have are reaping the benefits. When it comes to investing in mobile home parks, Lifestyle Investing expert Justin Donald had nothing but praise in his recent podcast.

“I’ve personally had two parks fully seller-financed, and then I’ve had four parks partially seller-financed. This is my favorite buying method because it is a ‘non-recourse loan.’ That just means they can only take the property back if anything goes wrong. They can’t sue you for all your other assets, which I like. It de-risks the deal,” Donald says.

As more people seek affordable homes to rent or buy, the mobile home parks star will continue to rise. Investors who get a piece of that action will be ahead of the competition. And that’s where you want to be.

2. AI Increases Efficiencies on Multiple Fronts

Artificial intelligence has revolutionized everything it touches. In real estate, it’s changing the way you do business on multiple fronts. Plus, it’s becoming easier for anyone to use. You must put this tool in your investor toolkit and keep up with it as it rapidly evolves.

As an investor, knowing precisely what the future would bring would be great. While that’s not possible, the predictive analytics of AI is coming close to making that happen. And it’s doing it like a champ.

The secret sauce is AI’s capability to cull and analyze massive amounts of data related to past and present market trends. AI does the heavy lifting you need to make decisions based on demographic trends, economic fluctuations, pricing, and more. These insights will increase your confidence in your investment choices, filling your portfolio.

AI can streamline property searches, giving you more accurate and timely information about potential investments. It can speed up the marketing of units with virtual staging and 360-degree tours. It can also help manage all the properties in your portfolio, from applications to credit checks to leases signed on the dotted line.

Whatever you do, don’t overlook the opportunity to use AI to improve your customer experience. While chatbots solve client problems, you can also research your next real estate investment. Be part of the AI revolution.

3. Tertiary Markets Hold Growing Potential

Those major urban centers comprising primary and secondary markets have always caught the eyes of savvy investors. After all, that’s where the people are – and they need real estate.

However, tertiary markets are becoming lucrative places to invest, primarily because there’s less competition in these smaller communities of one million souls or fewer. Getting on board before everyone else notices the trend is a smart move.

There are a lot of trends that make these markets attractive, starting with stellar occupancy rates. This tendency is likely due to the greater affordability of housing that discourages people from moving into larger markets. Plus, expenses such as property taxes, utilities, construction, maintenance, and repair costs are typically lower.

That said, some risks in tertiary markets may be higher. For example, if most people in that market work for a single employer, you may want to think twice. The same goes for communities that lack certain features that attract people, like access to healthcare, commerce, and higher education.

Tertiary markets can thrive with key infrastructure like cell service, high-speed internet, and good roads and bridges. They won’t have the population saturation of primary and secondary markets. However, they may hold solid investment potential nonetheless.

4. The Market is Demanding Sustainability

More and more people are worrying about the health of the planet. The effects of climate change, like rising sea levels, wildfires, wind events, and flooding, are impacting where they can live. So, people are looking for ways to lower their carbon footprint so things can get better, not worse.

Climate-event-prone real estate may tighten buying potential. However, there are many opportunities for sustainability-driven real estate investment. And investors who get on this train now will enjoy a ride with fewer starts and stops.

Renovating existing residential and commercial properties is a greener option than new builds. Whether remodeling or constructing, using sustainable materials and smart technology to lower energy consumption is vital. Hedging bets against weather events, like installing metal roofing, impact-resistant windows, and steel framing in hurricane-prone regions, benefit everyone.

A significant portion of real estate was built without regard to sustainability. Renters and buyers are placing more and more value on that issue. That means investors who can offer these upgrades will keep properties full and sell them at a profit when they’re ready. 

As a real estate investor, you can positively impact the planet physically and socially. Investing in such items as affordable housing and eco-friendly buildings adds value to your portfolio over the long term. And you get the bonus of feeling good about making greener returns.

Build Your Empire

The point of investing in real estate is to build wealth. If you remain vigilant about the trends that affect your investments, you may find them outperforming the competition.

Affordable housing, AI, tertiary markets, and sustainability are just four issues affecting the real estate market – and these will affect your bottom line. Keep your eye on these and others that arise, and you won’t just build wealth. You might just build an empire as well.