7 Factors Pushing More People Into Real Estate Investing

It’s likely that you’ve recently heard of more people interested in real estate investing. You might have friends, family members, and other close acquaintances talking about their new rental properties, or you might have simply seen headlines offering opinions about recent activity in the real estate market.

Real estate investing has always been somewhat popular in the United States, but is there an explanation for the relatively new surge in real estate investing interest?

The Factors Pushing More People Into Real Estate Investing

These are some of the factors pushing more people into real estate investing:

Awareness of potential gains. First, people are becoming more aware of the potential gains in the real estate market. In the past decade or so, millions of people have watched the value of their properties climb to previously unfathomable heights. During and slightly after the COVID-19 pandemic, we watched multiple investment firms gobble up as many rental properties as they could. It’s no longer a secret that real estate investing can be a lucrative path – and more people are interested in exploiting this opportunity.
Availability of experts. We also have better access to experts than ever before. If you’re looking for a new property, you can find a real estate agent in a matter of minutes and get support in your search. If you’re renting a property (or several), you can utilize the services of a property management company, which can take care of almost everything on your behalf. No matter how much experience or knowledge you have, there’s plenty of support to help you achieve your real estate investing goals.
Online listings. Online listings have also dramatically changed the real estate investing landscape. These days, you no longer have to leave the house to tour properties or scout for good deals. Instead, you can browse online platforms to see what’s for sale, explore virtually, do your research, and potentially even make an offer. You can also connect with people online to discover unlisted and unmarketed properties.
Online educational resources. Similarly, the internet has provided us with an abundance of online educational resources. Regardless of whether you’re already familiar with the fundamentals of real estate investing or you’re new to the game, you can delve into myriad materials to refine your own understanding and maximize your chances of success. The more you learn, the better you’ll be at real estate investing – and there’s no upper limit to the knowledge you can acquire.
REITs and alternative investment options. People are also more active because of the sheer number of ways that you can invest in real estate. If you don’t like the idea of becoming a landlord, or even buying a property in your own name, you can invest in real estate investment trusts (REITs). These equities function very similarly to stocks and bonds, allowing you to buy and sell shares quickly and easily; it’s a way of getting indirect exposure to the market.
Relatively low interest rates (and financial leverage). One of the greatest advantages of real estate investing is the opportunity to utilize financial leverage, which is basically investing with borrowed money. However, the strength of financial leverage depends on the quality of the loan. Today’s interest rates aren’t at rock bottom, but they are relatively low from a historical standpoint, attracting lots of investors to the field.
Excitement and FOMO. There’s also been a lot of buzz and excitement around real estate investing as of late. In some ways, it has generated a collective fear of missing out (FOMO), driving more people to acquire properties in anticipation of future gains.

Key Caveats to Consider Before Real Estate Investing

If these motivating factors have inspired you to invest in real estate on your own, take a pause and consider these important caveats:

Capital demands are still significant. Unless you plan on investing exclusively in REITs, you’ll still need significant capital to get started. Not everyone is in a position to save a down payment easily.
Every investment carries risk. Real estate has performed well historically, but every investment carries risk. You’re not guaranteed to succeed just because you purchased property.
Due diligence is imperative for success. In real estate, the deals tend to be big and impactful, so it’s important to practice thorough due diligence with every sale or acquisition.

There’s no such thing as a perfect, risk-free investment, and real estate is no exception. There are many good reasons to invest in real estate, and the current hype around the real estate market is legitimate, but it’s still important for you to refine your own skills and do your due diligence before making any moves.