How the Trend Toward Remote Work will Impact Real Estate Portfolios

Posted by: mihaighimciuc 9 December 2020 No Comments

While certain world events have encouraged more people to work from home than ever before, there’s no reason to believe that people wouldn’t have been transitioning to remote work anyway. High-speed network connections are almost ubiquitous at this point and many people carry more than enough technology in their pockets to go to work from nearly any location. Since employers in almost every sector are allowing people to work from home, it’s safe to say that we’ll soon start to see some pretty big changes in the real estate market.

At one point, many investors added a large amount of office space to their portfolios with the intent of generating long-term revenue by assessing rental fees. According to a recent study, around 25 percent of respondents plan on continuing to work remotely even after it’s safe to return to a physical office. That would suggest that this kind of property might not be as lucrative as it’s traditionally been.

The same study suggested that over half of those surveyed claimed that they would move if they were allowed to continue working remotely. This provides a number of new opportunities for real estate investors who can tolerate a reasonable level of risk.

Investing in a Rapidly Changing Housing Market

If large numbers of Americans start to move in the next few years, then the prices of homes with certain features will potentially skyrocket. Some people will want to have dedicated office space inside of their residences to use for their jobs, which could substantially increase the initial asking price that existing homeowners can request. Investors don’t necessarily need to buy properties with these features to benefit from the changing marketplace, however.

Publicly traded companies that perform certain types of interior remodeling services may rally on Wall Street in the coming months. These firms could potentially see a dramatic increase in their sales numbers over the next fiscal year. Companies that offer real estate home warranty policies are also poised for big gains. Individuals who purchase investment properties often need to take out these policies in order to protect appliances and HVAC equipment that’s currently installed in homes they buy. As a result, those who can’t afford to purchase homes themselves might want to look into purchasing securities issued by these firms.

Investors who already have portfolios will want to start looking at new ways of selling their existing properties rather than converting some portion of their real estate holdings into liquid securities.

Shifting Real Estate Marketing Paradigms

Paradoxically, individual investors probably won’t want to pay for remodeling services by themselves. While home warranties are almost always a good buy, putting too much work into a home won’t pay off. Therefore, it might be best to simply change the way you frame a home’s features. Since people are buying homes online as well as working in a virtual office, you shouldn’t find it too difficult to reframe your promotional literature.

An existing three-bedroom home could be sold as a two-bedroom house with a dedicated office. Some real estate experts have even started to promote dens and extra hallway space as makeshift offices. You may even want to promote these features by finding all of the businesses within a 50 mile radius of the home and posting flyers near these organizations. That kind of guerrilla marketing might prove attractive to those who’ve recently been given the freedom to work from home.

If you’d prefer to hold onto your rental properties, then there are a few easy ways you could attract more tenants who are looking for a place to live in that they can work from. Promote larger studio apartments as workplace-ready, since they provide ample room for setting up desks and computer equipment.

Focus on ready-built real estate if you’re adding anything to your portfolio, since current market conditions are such that buying homes and apartment complexes should prove rather affordable. When you get a new building, make sure to look through each residence to see if there’s anything that might be attractive to someone who plans on spending more time at home.

As people spend more time in their residences, they might want access to exercise equipment and bigger outdoor spaces. On the other hand, it’s likely that they might no longer need extra parking spaces because many people won’t be traveling nearly as much.

While current market conditions might seem bearish to many, they also create a large number of opportunities for those willing to take them. Keep an eye out for any fluctuations in the housing market and adjust your portfolio accordingly. You should find that the trend toward working from home can help you dramatically improve your own prospects.