Real Estate Investment Strategies for 2019

The rules of real estate investing are rapidly changing. With the rise of the digital era, investors must quickly adapt to new technology and new rules. In 2019, investors must remain flexible and be willing to adopt change in their investment strategies. What worked five years ago may not work today. Here are some tips to help make 2019 a banner year for real estate investors.

Study Real Estate Market Data

Investors should study real estate market data every year, not just in 2019. Data tells a story about neighborhoods and the climate of the housing market. Interest rates, construction costs and neighborhood trends are a short list of data points that investors should carefully study. Real estate apps and the internet make this easier than ever before.

Think of Market Slowdowns as an Opportunity

Many real estate experts suggest the market will experience a cooling trend in 2019. The deals that did not make sense last year or the year before might make sense this year. If rents stay strong and values start to decline, it could present a solid opportunity to invest in multifamily real estate.

Pay Attention to First-Time Homebuyers

With rising interest rates and tight inventories, most homeowners are staying put. However, there is always demand from first-time homebuyers. Experts suggest that flipping starter homes in 2019 could lead to nice profits, while the rest of the housing segment sits on the sidelines until the market stabilizes.

Focus on Equity

Some experts predict that housing prices will start to peak mid-year. If the predictions are true, it could be the right time to extract some equity. Cash in hand gives investors the flexibility they need to secure deals with a proven rate of return. Cash also helps investors transition into other classes of real estate.

Invest In Low-Income Communities

Congress created Opportunity Zones as part of the tax bill in 2017. These zones provide investors with tax breaks and incentives if they invest in distressed communities. Every state in the U.S. has locations designated as Opportunity Zones by Congress, and most real estate websites offer maps of the specific zones.

2019 could be a tricky year for real estate investors. Some experts say interest rates will continue to rise, while others suggest they will fall. What remains a constant in the industry is a sound investment strategy always delivers in any market conditions.

(I originally discussed this topic at JasonCohenPittsburgh.com.)

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Should You Rent or Own in Pittsburgh, Pennsylvania?

Part of the American dream is to own a home. Unfortunately, the dream can quickly turn to a nightmare if a person invests in a “money pit.” Whether new to the area or a long-time resident of Pittsburgh, many wonder if they should rent or buy their abode. Those who want to build wealth and give their credit score a significant boost should take on the role of a homeowner. However, it all comes down to lifestyle and finances.

Pittsburgh is Rental Territory

recent study was conducted that looked at 23 cities across America. Pittsburgh was one of the 16 that fell into what was called rent territory. Being in “rent territory” means that renting is wiser and will help with wealth creation. Though the entire country has shifted to ownership territory, it wasn’t always this way. Back in 1999, the rental market was booming. People who wanted to make long term commitments by purchasing a home, however, plummeted.

Home Ownership Demands Drive Prices Up

The demand for ownership has decreased in some major cities throughout the United States. Places like Atlanta, Houston, Kansas City, and Miami have all seen a decrease in home sales and an increase in rentals. As more people look to rentals for their housing needs, it puts pressure on the housing prices to decrease. Part of the reason why rentals are up in some areas is that prices hit all-time highs and the inventory selection was low.

During the first part of 2018, homes on the market in the Pittsburgh area took an eight percent increase in price. Additionally, there was a ten percent increase in home volume sales. The cost of a home has a significant impact on shifting a market from a renting territory to an ownership one. If homes are affordable, then many people want to invest in something that they can own. However, if the home prices are inflated, many feel that renting is a great way to save money before making such a commitment as homeownership.

The Final Decision

As with any area, the decision to rent or own in Pittsburgh often comes down to financial comforts for each individual person. For some, it’s more attractive to have a landlord pay for repairs, taxes and insurance, while also avoiding the large initial down payment. Others are ready to make the financial commitment to have a place that’s all their own.

A financial advisor or real estate professional can be a great resource for people who are on the fence between renting and owning.

I originally discussed this topic at JasonCohenPittsburgh.org.

Pittsburgh Real Estate: The Market in 2018

Those looking to make a savvy investment may want to look towards Pittsburgh. George Hackett, president of Coldwell Banker Real Estate Services in Pittsburgh, remarks that home sales have been “extraordinary” for 2018, citing a ten percent increase in home sale closings over the past year.

Pittsburgh, Pennsylvania isn’t the most booming market in the United States. It’s currently rated as the twenty-second most populous city in the country, but that can be seen as a positive given the long-term history of the city. The collapse of the city’s reputation as the steel manufacturing capital of the country presaged a nosedive for Pittsburgh’s economy, but today it’s seen as undergoing something of a renaissance.

Pittsburgh has been drawing in national tech companies like Uber and Apple, and with that comes both an influx of new residents and a higher standard of living. The sudden growth of industry in the city brings with it new investments in luxury boutiques and an aggressive push to make more appealing and livable spaces in the once-floundering metropolis.

Further bolstering this economic boom is a new initiative by the University of Pittsburgh Medical Center. They’ve recently announced plans to build a $200 million immunology center that could draw in scientists and medical professionals from around the world.

And while it’s easy to speak in anecdotes about a city’s health, these particular anecdotes come backed by some respectable numbers. Home prices have increased on average by almost eleven percent in the past year, putting the new median home price at $142,800. While that’s a significant increase, it still puts pricing well below the national median of $216,700. That leaves prospective homeowners in a promising position.

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I originally discussed this topic on my blog at JasonCohenPittsburgh.com.

Will Pittsburgh be Home for Amazon HQ2?

Jason Cohen is a Pittsburgh-based real estate investor with over a decade of experience in his field. Cohen firmly believes in the value of research prior to investment, and took a considerable amount of time to research the risk and rewards inherent in the Amazon deal. Below, Jason Cohen outlines his findings.

How far would your home city go to attract Amazon’s attention? In August, the tech giant announced its intention to build a second headquarters in North America, prompting a deluge of enticements and bargains – some tinged with more than a little desperation. One tiny city in Georgia even went so far as to offer to change its name to Amazon if it was chosen. Bargains like these seem absurd, but it’s easy enough to see why prospective HQ2 cities would go to such lengths to attract attention. The tech giant promises to invest $5 billion in its satellite facility, and bring with it over 5,000 high-paying jobs. As Steve Glickman, cofounder and executive director of the Economic Innovation Group, puts it in an article for CNNMoney, winning the bid for HQ2 is akin to “winning the lottery […] [it’s] an event you can’t duplicate any other way.” With over 230 cities vying for placement, catching Amazon’s interest is a long shot – but some economic analysts think that Pittsburgh, PA has a solid chance of being the company’s next home.

Currently, Pittsburgh ranks in the #5 spot in Moody Analytics‘ list of top contenders. The Forbes-recognized analytical firm took factors such as business environment, available human capital, transportation availability, quality of life, and the cost of doing business when making their considerations. According to their report, Amazon’s ideal satellite site would offer a bargain tax package and affordable land, as well as a supply of workers and the means to support them via transportation and housing. Pittsburgh itself stands above its competition as an already-burgeoning tech hub and thriving city center. It also has the advantage of being within several Amazon executives’ home state;CFO Brian Olavsky, for example, is from Hershey, PA. The city declared its candidacy as many cities did: via a cheery video offering Amazon a home within its borders.

Given the immense potential investment and promise for unheard-of levels of economic growth, every city wants to snag Amazon’s HQ2.  But as a whole, real estate investment advisors within Jason Cohen Pittsburgh are hesitant to leap onto the pro-Amazon wagon. In the promise of incipient wealth, many cities have overlooked the glaring problems that will accompany the company’s second site. For a glimpse of what might come if Amazon sets its roots in Pittsburgh, one only has to look to California. On the west coast, tech companies have sparked massive growth in city economies – and dramatic housing shortages. Affordable apartments are hard to come by in cities like LA, where a 2-bedroom apartment can cost over $4,000 per month in rent, nearly twice the national average. Even the best deals come with a catch – and Amazon’s too-good-to-be-true promise of  investment is no exception.

Amazon hasn’t chosen a location for its second home yet, and its deliberations have become a constant topic of speculation. But perhaps the question should be turned on its head; rather than asking, “What city will Amazon choose,” we should wonder “Will our city accept Amazon?” In the glitz and glam of potential growth, cities have forgotten the high housing cost the company will unwittingly place on Pittsburgh’s current citizens. Amazon’s deal is built with fool’s gold – and those at Jason Cohen Pittsburgh urge those in the city to consider the risks before leaping at its potential rewards.