According to Elliot Adler, a San Diego real estate developer and REIT manager, there's rarely been a better time to invest in property, especially those overlooked by others. Adler has recently put together a handful of his favorite opportunities. These commonly overlooked possibilities start with foreclosures, perfect for anyone looking to follow in his footsteps in 2023.
"Despite their widespread nature, foreclosures are an all-too-often overlooked investment opportunity in real estate," says the expert from his home in San Diego, California.
Foreclosed properties are those that banks have repossessed after previous owners have yet to keep up with loan repayments.
These properties are often sold at a discount, making them attractive investments.
"The downside to this type of investment is that the property may need significant repairs and renovations," notes Adler, "which can be expensive, so you must factor in this potential extra cost at the outset."
However, this could also be a profit source, he says, as some cosmetic upgrades to the property could significantly enhance its value.
Next, Adler turns to vacation rentals. Vacation rentals as investments are becoming increasingly popular. For now, he says, they remain a largely overlooked opportunity.
A vacation rental is typically a property leased to short-term occupiers for varying fees. Elliot Adler explains that the short-term nature of such agreements is critical.
"Vacation rental can be a great way to earn passive income from a property that's used some but not all of the time," explains Adler. "That's because the owner can set varying rental rates and determine when the property is rented."
Meanwhile, and in a similar vein, Adler’s third overlooked real estate investment opportunity for 2023 is short-term rentals. Sharing many of the same principles as vacation rentals, broader short-term options have recently started appealing to more and more investors. Despite increasing popularity, short-term rentals still need to be noticed.
Because investors can lease out short-term rentals on a weekly or monthly basis, they allow for a higher rate of return. However, there are some downsides to this type of investment. Chief among these downsides is that short-term rentals often require additional work to manage owing to the high tenant turnover.
Elsewhere, and for those looking for a more traditional real estate investment strategy, other options may be looking toward so-called fixer-uppers. While not necessarily massively overlooked, fixer-uppers have fallen slightly out of favor as investors turn more toward the likes of vacation and short-term rental properties. As such, there's less competition in the market than previously.
As the name suggests, fixer-uppers are properties that need repairs or renovations. Because of this, they're invariably sold at a discount. Although potentially time-consuming, there's usually fantastic scope to add value.
"As a result, you can achieve a higher return on your investment in a shorter time frame than you might do elsewhere," he adds.
And last but by no means least, Elliot Adler mentions commercial property. An area of expertise for the San Diego-based investor, commercial real estate needs to be noticed by many people entering the market for the first time. Commercial property can be a great investment opportunity, but with a few caveats.
Right now, demand for commercial property continues to fluctuate. That's because more and more people are working from home, limiting calls for office space. Yet, elsewhere, demand for warehousing is growing. "It's about striking a balance."
Adler says prospective investors looking to purchase their first commercial property must also consider the additional costs involved. One common drawback to this type of investment is that it can be markedly more expensive than buying residential.
"Commercial properties also tend to require more maintenance and upkeep," he adds, in closing, "but high rates of return, in the long run, should offset this."
These are just a few overlooked investment opportunities in real estate in 2023. As with all types of investment, it's essential to thoroughly research and appreciate any implications before making a decision. Investing in real estate can be great for generating income and building wealth, but it's vital to acknowledge the risks involved before committing.
About Elliot Adler
Elliot Adler San Diego-based real estate developer and REIT manager, is a California native and property expert. He has cultivated a considerable knowledge of commercial and residential real estate investment during his years in the field, where he is widely regarded for his outstanding attention to detail. He is also firmly committed to ensuring the best interests of those with whom he works.