by Theresa Bradley-Banta
By the time you hear about hot new trends in real estate investing there’s a good chance you’re too late to the party.
Warren Buffett summed it up beautifully:
“Only when the tide goes out do you discover who’s been swimming naked.”
In 2008 and 2009 I told my investing partners multifamily real estate would be the hot real estate investing market in the next few years.
I was right.
How did I know multifamily was the up-and-coming hot new trend? First, the changing demographics pointed that way. Second, I read industry news, magazines, books and market reports—and I networked within the industry. I still do.
But in some multifamily markets it won’t be difficult to see who’s been swimming naked. You’ll begin to see headlines such as this one from Kristena Hansen of the Phoenix Business Journal: Vacancies up, rents down as apartment construction surges.
There are two important messages here:
One: Stay on top of your industry and know that when the media hype begins, chances are the tide is going out.
Two: Investing in real estate is a smart thing to do but you must know your market.
Back in 2007 we saw the condominium conversion craze. Investors were snapping up apartment buildings with the idea of converting rental units to condos. By the time the real estate investing gurus were holding condo conversion boot camps across the country, it was too late in a large number of markets.
The investors who arrived late to the condo conversion game found themselves unable to sell condominium units. Instead, they saw their high-end conversions back on the rental market as apartment rentals. Nicely appointed apartment rentals.
Leah Etling, Contribuing Editor at MHN Online, has an interesting interview here: Chicago’s Conversion Conundrum.
If you’re a multifamily investor, or new to the game, I recommend you make keeping up on industry news a daily habit.
Sources for studying new trends in real estate investing:
Follow my tweets @tbradleybanta. I post an array of media articles (the good, the bad and the ugly) from many sources.
Set up a Google Alert for search queries such as “multifamily.” You’ll receive e-mail updates of the latest relevant Google results (web, news, etc.) based on your specific search query.
Read the following posts. You’ll find multifamily real estate investing links and resources—almost all are free.
Investing in Apartment Buildings – Some Mostly Free Resources
Contact me for a free consult. It’s always a great move to test your ideas with someone else.