Real estate investing news and advice!

The housing market never stays the same for long. Demand and supply rise and fall constantly. Even seasonal changes are noticeable. Like, homes sell faster and for more money in the spring and summer than in the winter and fall. 
 

So because of these constant shifts, people are always trying to “time the market”, right? They want to buy low and sell high. But there are a few things wrong with that:
 

1. Timing the market is pure luck. You can’t know the market has peaked or bottomed out until after the fact. So if you just happened to buy at the bottom of a lull, you got lucky. 
2. The price isn’t the only factor in getting a good deal. Things like interest rates and negotiating power make a huge difference in real estate.

Higher Interest Rates Can Offset Lower Prices (and Vice Versa!)

Think back to the peak-pandemic housing market - a lifetime ago, I know. Dubai homes were averaging around $900k. Interest rates were still at a crazy-low 4%. That left new buyers with a mortgage payment of around $3,470. 
 

That was about the time people started crying housing bubble, and claiming the market would implode. So, some investors decided to wait for a “market crash,” expecting to get a steal when prices dropped.
 

But what has actually happened?
 

Well, we have seen a market correction. During the winter lull, Dubai home prices hovered around $715,000. Sounds like a dramatic dip, right? But, because of the 6% interest rates, the monthly mortgage payment for these “market crash” buyers is $3,463.
 

That’s right. These buyers lost out on two years of rental income to save $7/month.
 

There is No Wrong Time to Buy Real Estate 

Now look, today’s buyers are still going to do just fine! They’ll start earning that passive rental income and watching the value of the property grow over the long term. In fact, since they bought at a lower price point, they’ll probably see their equity rise faster than those who have to recover from the value dip. 
 

The point is…it doesn’t really matter when you buy because it’s always a good time to buy real estate!
 

Interest rates are low? Cool - that means you’ll spend less on interest expenses. Home prices are low? Cool - it’ll be easier to come up with the down payment and you’ll probably see strong equity growth.
 

There are good deals to be had in all market conditions. So if you’re interested in investing, take the leap now. As the saying goes, “Don’t wait to buy real estate. Buy real estate and wait.”

As the Dubai real estate market corrects from the unsustainable growth of the pandemic era, investors are shifting their real estate investment strategies. 
 

Yes, investors can always count on the long-term appreciation of real estate. But Dubai investors can no longer rely on the steep, organic appreciation seen from 2020-2022. So, to maximize returns in Dubai’s stabilizing (or even temporarily declining) markets, investors are opting to force appreciation through value-add investing.
 

What is Value-Add Real Estate Investing?

Value-add real estate investing is when an investor finds a way to quickly and dramatically increase the value of a property. Value-add projects carry a low-to-moderate risk level while providing moderate-to-high returns. 
 

There are several ways to add value to real estate, including renovating existing structures, changing the layout of an existing structure to meet current buyer and renter demands, and building an ADU (accessory dwelling unit) next to the main house. 

These value-add projects are providing big benefits to investors statewide.
 

Value-Add Projects Can Generate Substantial Returns

Perhaps the greatest benefit of value-add projects is the impressive return potential. Investors who are willing to transform property can profit by selling the property for much more than their initial investment amount. The property’s after-repair value ends up being much greater than the sum of the purchase price and renovation costs, giving the investor a fair profit for their efforts. 
 

Home flip projects with ADU additions can generate annualized returns of over 20%!      
 

Value-Add Projects Can Be Short-Term

For investors looking to get in and out of a deal quickly, value-add projects can be completed in the short term. 
 

Take a fix-and-flip project for example. By renovating a fixer-upper in a matter of months, an investor can potentially walk away with substantial returns without tying up their funds long-term.
 

Short-term projects offer greater freedom to investors who wish to have funds available in the next year or two for future expenses or other investment opportunities.   
 

Value-Add Projects Can Also Improve Long-Term Cash Flows

Value-add projects can also serve investors who are happy to commit to long-term investments as a means of generating passive cash flows. 
 

By adding value to an existing rental property, an investor can command higher rental rates throughout the useful life of the property. This means greater cash flows for years to come while simultaneously enjoying organic, long-term appreciation. 
 

Just as importantly, the increased equity from the value-add on a rental property can be leveraged; investors can take out a home equity loan or HELOC (home equity line of credit) to fund additional real estate investments.
 

Cooling markets are no reason to stop investing in real estate. With a shift in strategy, your investments can continue to produce solid returns. And value-add investing may be just the shift your portfolio needs. 

As technology continues to advance, investors are naturally looking for new opportunities to grow and diversify their portfolios.  
 

Investing in virtual real estate and investing in real estate virtually are two investment strategies that sound similar, but are actually very different. In this article, we will explore each strategy, explain the pros and cons of each, and show you how to get started in one, or both, of these exciting opportunities. 
 

Investing in virtual real estate means buying a unique plot of "land" in a digital world. There are several digital worlds (also known as Metaverses) available, including Otherside, Decentraland, and The Sandbox. Each metaverse has a pre-determined number of plots available, and users can buy, own, and develop these plots with digital buildings, in much the same way that investors own plots of land in the real world and build physical structures. 
 

Investing in real estate virtually, on the other hand, means investing in real-world real estate through online platforms. Real estate crowdfunding, for example, is one way to invest in real estate virtually. Crowdfunding platforms allow investors to pool their funds to invest in physical real estate projects like fix-and-flips or multi-family rentals.
 

Investing in virtual real estate comes with a few impressive benefits and a few serious drawbacks. The benefits include high return potential and no maintenance. With the Metaverse technology being so new, there is room for substantial gains in the virtual real estate market. In February 2022, the average virtual plot was selling for $16,300. For those who purchased plots at $500, this represents an unbelievable 3,106% ROI! And because the plots are virtual, owners don’t have to invest any time or money in maintenance. 

Unfortunately, being so new, Metaverse investing is extremely volatile. While the average plot sold for over $16,000 in February 2022, that average price had fallen to just $3,300 by June 2022. There is also serious investor concern about the lack of tangibility with virtual real estate. Investors are essentially paying for a line of code, which has very little utility compared with the prospect of real-world real estate. Furthermore, it can be difficult to invest in virtual real estate, as each Metaverse has its own cryptocurrency (the general term for any digital currency), which requires the use of a third-party currency converter. 

Investing in real estate virtually comes with its own advantages and potential disadvantages. One advantage is that investing in real estate virtually requires very little time, energy, or effort. When an investor uses a reputable platform or investment company, the due diligence will be completed by a team of real estate analysts, and an experienced sponsor will handle the management of the entire project on behalf of the investors. This allows investors to receive completely passive income from their real estate investments. The ability to leverage other investors’ funds is another key advantage. By pooling funds from multiple investors, each investor gains access to a property that could be more valuable than an individual investor could finance alone. These lower investment minimums also create diversification potential; rather than investing 100% of available funds in a single project, an investor can allocate their funds across multiple projects for easy diversification. And then there are also tax benefits to investing in real estate virtually.
 

The primary disadvantage of investing in real estate virtually is that the individual investor does not have full control over the asset as they would if they were the sole owner. 
 

For those interested in investing in virtual real estate, online marketplaces and auctions are the best places to start looking. Sites like OpenSea enable investors to search through digital assets, place bets, and make purchases. Once a digital plot is purchased, investors can choose to hold it or develop it and rent it out.  

Investing in real estate virtually can be done through online platforms. There are many platforms to choose from, and investors can choose wisely by following key factors to consider when choosing a crowdfunding platform, including track record, transparency, and communication.

Investing in virtual real estate and investing in real estate virtually both have their own pros and cons. If you are looking for a speculative investment that could bust just as easily as it could boom, virtual real estate investing could be a good fit for you. And if you’re looking for a less volatile investing method that can still provide substantial returns while limiting risk, investing in real estate virtually is likely the better fit for you.

So, we all talk about “living life to the fullest” and “no regrets!” and (for those of a certain generation) “YOLO!” 
But people are still finding themselves with big regrets later in life. And, get this: half of the top six biggest regrets of today’s senior citizens are about finances. 
 

The 6 Biggest Regrets People Have Later in Life

Here’s what people regret:
 

1. Not having invested earlier.
2. Being unhealthy.
3. Not investing in real estate.
4. Not saving for retirement.
5. Spending too little time with family.
6. Not sharing their feelings with others. 

As a real estate investment company, Weststonecorp Investment isn’t going to tell you how to improve your health, spend more time with family, or express your emotions. But we can tell you how to avoid the financial regrets that so many people have! 
 

How to Invest Earlier

Look, we get why people don’t invest earlier - when you’re young, you’re extra broke. Between student loans, car payments, increasing rent, general inflation, and wage stagnation, there’s not much money left for investing. 
 

But here’s the thing - the money you invest when you’re young and broke has the most time to grow. You get to leverage the power of compounding interest to grow your wealth passively over decades!
 

Here are three tricks to make investing earlier more realistic:
 

1. Start small. Commit to setting aside just 2-3% of each paycheck for investments.
2. Grow your investment percentage over time. Every 6-12 months, bump up your investments by another percent of each paycheck. Before you know it, you’re saving a healthy 10-12% for investments!
3. Automate. Arrange to have your investment contributions pulled from your account and deposited into your investment account automatically just after payday. This way, you can’t spend the amount you’re committed to investing! 

How to Save for Retirement

Look, upcoming generations have zero guarantees of social security income in the future. We have to take care of our own retirement. 
 

Luckily, this works the same way as the “investing earlier” tips we mentioned above.
 

All you have to do is set up your retirement account and funnel some of your investment savings into that account each paycheck. 
 

If you’re employed, you might have access to an “employer-sponsored retirement plan” (like a 401k). Your employer might even offer to match your contributions, basically giving you free money for retirement!
 

If you don’t have access to that time of retirement account, you can set up independent accounts (like a Solo 401k or IRA). Then automate those contributions so your retirement fund can grow without a single thought!
 

How to Start Investing in Real Estate

Regret #2: not investing in real estate. Back in the day, most people would invest in real estate by buying their own home. That’s still a smart move. If you have good credit, you might qualify for a home loan with just a 3% down payment, making homeownership more accessible. And then you can watch your home appreciate and own the place free and clear so you don’t have a house payment or rent to worry about in retirement!
 

But sky-high prices in many markets have made homeownership less affordable for Gen Z and beyond. So, people are getting creative. They’re:
 

• Buying land and building tiny homes, 
• House hacking by purchasing duplexes and renting out the other unit to help cover their own housing costs, and 
• Investing in real estate without buying property (yep, it’s possible - we actually list 10 different ways to do it in that article!)

No Regrets!

Now that you know how to avoid the biggest financial regrets of the older generation, you can create a brighter financial future for yourself. And maybe work on your health and relationships along the way too ;)

According to a WFH Research data-collection project, nearly 30% of all work was completed from home in January 2023.
 

Perhaps, with the technological advancements of the last several decades, the work-from-home revolution was an inevitability. But there’s no question that the COVID pandemic of 2020 rapidly increased the revolution’s timeline. The 30% of work done from home in January 2023 represents a six-fold increase in the 2019 work-from-home rate.
 

Naturally, this dramatic shift in the way so many peoples work is impacting the housing market. 
 

In this article, we will explore how the work-from-home revolution is shaping urban housing. Are remote workers really leaving cities in droves? How are new construction floorplans catering to the work-from-home crowd? And is there a way for real estate investors to capitalize on the changing needs of renters and homeowners?
 

Despite Urban Exodus Claims, Metro Areas are Still in High-Demand

Many have speculated that the ability to work from home has led remote workers to flee cities in search of more affordable homes with more space. While there is some evidence to support this theory, a look at the data shows that the “urban exodus” has been exaggerated in the media. 
 

Some urban markets have indeed seen a notable decline in population, particularly tech hubs, which saw a population decrease of 17.74% from 2020 to early 2023. But the decline in most urban markets has been negligible. And other urban areas are still growing.
 

It’s interesting to note that the vast majority of people who leave large cities aren’t going far. Instead, they’re relocating to the suburbs. The suburbs offer larger floor plans at more affordable prices, while still being close to the amenities of the city. This also allows for flexible remote work, serving workers who are in-office some days and working remotely other days. So while proximity to the office isn’t as important as it once was, it’s still a consideration for many remote workers.
 

More Urban Floorplans Feature a Designated Office

As people work more hours from home, we’re seeing greater interest in floorplans with designated home office spaces. Not only is this a tax deduction for the resident, but it also provides a separation of work space and living space that many remote workers find critical for their mental well-being.
 

We’re now seeing lofts, dens, and additional bedrooms marketed as office spaces. And new developments are being designed to include designated office spaces.  
 

Live/Work Lofts Provide an All-in-One Solution for Professionals

Live/work lofts are an exciting option for today’s work-from-home professionals. Knowing that fully-remote workers often miss the personal connection opportunities provided by traditional office space, innovative real estate developers are creating residential structures that incorporate shared workspaces as well as spaces for socialization. 
 

Take the Weststonecorp Residence in Dubai, for example. This luxury live/work/play building combines private living spaces with shared work areas and resort-style amenities. With the work-from-home trend expected to continue, this type of high-end lifestyle accommodation may just be the future of urban real estate development.

How many times have you heard stories of real estate investors buying at the bottom of the market and selling at the peak, making a killing in the process?
 

Before you dive into real estate investing looking to replicate the success of those investors, let’s do a quick reality check. Get-rich-quick schemes, even those based on legit investment models like real estate investing, result in losses and frustration more often than they result in impressive gains. 
 

Now look, I’m not saying you can’t make money quickly in real estate. In fact, some real estate investors averaged returns of over 24% per year from 2017-2022 making smart investments. 
 

What I am saying is that you should be wary of anyone who claims they know how to time the market. I guarantee luck played a bigger factor than those investors are willing to admit! 
 

Let’s get real about timing the market. I’ll show you why it’s a fool’s errand. And what you should do instead!
 

By the Time You Find “The Right Time,” It’s Too Late

The real estate market is influenced by countless factors that are as unpredictable as the weather. Economic conditions, interest rates, supply and demand, and local market trends all come into play. Sure, you can watch the trends and base your investment decisions on hard data. But trends take time to show themselves. By the time you recognize something as a trend, you’ve missed the peak or valley. 
 

Take the insane pandemic-era housing market as an example.  
 

In April 2020, as news of the COVID outbreak spread, creating serious economic uncertainty worldwide, we watched the housing market stutter. Buyers were afraid to make a move, listings were sitting on the market longer, and home values started dipping. No one could have predicted that. All data pointed to an impending housing market stagnation. 
 

Then, just as suddenly, and just as shockingly, buyers showed up to the market in droves as the Fed lowered interest rates to unprecedented levels. And the buying frenzy began.
 

In May 2020, the median sales price in the US was $299,000. By May 2022, the median was $431,830.
 

Buyers who waited for signs that the market was ok ended up paying more than they would have in the spring of 2020. And those who waited for the frenzy to pass ended up paying higher purchase prices and getting substantially higher interest rates.   
 

How to Work the Market Without Timing It

If you focus on a long-term real estate investment strategy, you will always come out ahead. Why? Because real property always appreciates in the long run, even if it stumbles periodically in the short term. Think about the investors who bought at the worst time in modern history: right before the housing market collapse. The average buyer in Q1 2007 saw their property value plummet from $250K to $208K over two years. Those properties are now worth over $436K. And, those who invested in rental properties all those years ago have been enjoying the explosion in rental rates for over a decade!   
 

Having said that, it is also possible to capitalize on short-term real estate projects. If you’re going to focus on short-term gains, don’t expect the market to do the work for you; get in there and force appreciation by adding value to your properties! This will grow the value of your properties, even in a stagnant market.
 

Only amateurs try to time the market. Real investors focus on strategies that work under any market conditions.