As more buyers and sellers go online in search for real estate deals, there is the need for every real estate agent to have thorough and effective digital marketing strategies to employ in order to stay afloat in the real estate market.
In recent times, it has been discovered that over 90% of intending home buyers go over the internet in search of deals on new homes.
…..It is overwhelming to know that 50% of them also made use of the internet at the first instance in search for new homes.
This has become the trend and it has been predicted to gain much reception in the future thereby leading to an increase in the number of individuals making use of the internet in search of property deals.
This has been made possible by the influence of the Internet of Things (IoT).
In 2017, the records of home buyers and sellers show that 53% of them got the homes they bought as a result of the search they made online.
This is to show that majority of home buyers and owners make use of the internet to search and strike deals on real estate.
A beautiful thing to note is that they don’t only use the internet to search for properties; they also trust it as an excellent platform to trade. Many still use real estate agents as they see them as useful and reliable, the majority of individuals, most especially the younger ones, assert that the internet is more useful and reliable a source to find some cool real estate deals.
From these statistics, it then becomes a necessity for you as a real estate agent to up your game and comes to terms to reality in the real estate market in order for you to maximize profits and stay in business. You ought to have a strong understanding of the demands of potential clients, how they are using the internet to get their searches done and then position yourself to meet their needs by making yourself and services available through an online presence.
I present to you tools you can use as a real estate agent so that you can stay relevant in the world of real estate…….
Everybody in the digital world makes use of email addresses.
This has made email marketing to be a very powerful tool real estate agents can employ in order to remain relevant in the field and maximize sales.
…..Email has become the number one performance measurement tool in for fast returns on investments, capturing /generating of leads and ultimately converting them to paying clients.
….Think about this: if information about a good deal is sent to your prospects email boxes, it can stay there for weeks. Now, when you send rich, educating, helpful and sweet content with intriguing subjects about a prospective deal to them with an option for them to easily reply you and get a deal going.
Who do you think they will reach out to first when the time comes for them to take a decision as regards real estate deals? Yes, you got the answer right.
This points to you that email marketing is an essential digital marketing strategy that real estate agents should employ. In email marketing, you will have to build email contact lists.
This is very important as it becomes easy for you to send content about what will interest them with information about some good available real estate deals. Doing this should be a priority for every real estate agent as it helps you to keep in touch with prospects and you will no longer have to start afresh with your marketing.
It is interesting to know that when you constantly send good contents to prospects about real estate and deals, you are building a friendship with them.
This has been tested to be a good move as most prospects who later turned out to become clients were intrigued with the email messages they had earlier been receiving. Another beauty of email marketing for you as a real estate agents is that you can easily get referrals from your prospects/clients as they can easily forward your email messages to their friends and loved ones whom they know are looking for a deal or an agent in real estate.
With such referrals, you can be an established leader in the real estate industry in your immediate locality and state. This will directly see you having more real estate agents to yourself and more deals.
The only disadvantage of email marketing as a digital marketing strategy that you can employ as a real estate agents is that you have to be available always by mail.
…..If you can walk up to the demands of this strategy, it is advisable you get capable hands you can team up with in assisting you with the areas of fasting typing, correspondence, powerful writing ability and the monitoring of emails so that they can quickly and professionally respond to emails they can and forward those that need your attention.
……In the digital marketing world, it is often said that content is king.
You can’t have your way successfully in the of digital marketing without the understanding of employing highly qualified and search engine optimized contents.
Visitors Also Read :Price Of Dangote Cement In Nigeria
This is very important as it determines the outcome of your efforts in creating content…..
In content marketing, the aim is to create quality and highly optimized contents online so that Google and other powerful search engines can pick them up and index them for quality – both technically and contextually.
The quality of your contents has much impact on your content marketing as a digital marketing strategy for your real estate business because the content you create and publish on your blog, website, forum, social networks and other online platforms will serve as a bait to capture prospects, get your agency known by prospective buyers and sellers of real estate and ultimately win them to yourself as clients.
……..It establishes you as an authority and convinces people to work with you.
Therefore, the content you publish online should help among other things, to achieve the goal of closing sales.
Technology has come to stay and it has really affected the ways people do things, even to the extent of home buying and selling as they can be done and processed within a short time with some clicks.
As a real estate agent, you have to embrace content marketing. If you keep doing what you have always done, you will always get the same results. But when you leverage on the Internet of things, you work with these digital marketing strategies for your real estate consultancy, you are sure to see the great impact as you get to see more possibilities of limitless real estate business.
Get your digital marketing strategies for your real estate consultancy right and you are positioned to get more deals from buyers and sellers, thereby allowing you to rake more in earnings, grow your agency and become a great force to reckon with in your field.
SEARCH ENGINE MARKETING
With the Internet of Things, home buyers and sellers search for virtually everything about real estate on the internet with the help of search engines such as Google, Bing and Yahoo.
Their search queries range from the exact homes to buy, their prices, how quickly they are being sold, how the homes compare to other homes and who the agencies and realtors are for those homes. They even search for ratings and reviews from individuals in the past.
The searches made by homeowners and buyers lead to the result of some real estate agencies popping out.
Your understanding, as a real estate agent, on how to be easily found online by prospects is an invaluable resource that can increase your earnings and tentacles.
For you to be easily found online when searches are made demands that you be creative and technical.
You will use contents and images to post listings online, strategically including your agency in online directories, being proactive in managing reviews.
In order to make a success out of search engine marketing as a digital marketing tool for your real estate agency, you have to master the art and science of Search Engine Optimization and engagement.
Though technical, they are easy to learn and implement.
But if you don’t have the time to get SEO done for your real estate agency, get the services of an expert to help you out. This will help you to win as more buyers and sellers will get to see you when they search online for real estate agency.
Almost every activity happens on the social media.
Hence, it is a vital tool to leverage on as a real estate agent.
Social media can offer you the platform to meet and deal with homeowners and buyers before actual deals are secured. But just registering your [presence on social media does not profit as you have to be active with constant engagements of prospects.
Every post you make should drive a point about your brand identity, awareness, authority, connection, and convenience.
You need a website to connect with prospective buyers and owners of homes as real estate agents.
Everybody has now gone digital…
So, before you ask them for a meeting, they want to know more about.
So, having an online presence with the help of a website will go a long way, as a digital marketing tool to put you at the lead in your industry. Do not ever look down on the potentials of having a website for your real estate agency as they are limitless.
You will do much more and better with a website for your real estate agency.
With every new day, more companies and organizations are stepping up to help cash-strapped federal workers survive into a second month without paychecks. Restaurants, museums, movie theaters and live entertainment venues are among the for-profit and non-profit venues offering everything from discounted meals to entirely free attendance at movies and shows. Given that housing is generally the largest line item of expense in Americans’ monthly budgets, it only makes sense some of the largest real estate firms in the nation have also come to the rescue of furloughed federal staff.
Among them is Scottsdale, Ariz.-based Progress Residential. The company’s more than 25,000 properties in 15 fast-growing American metros make it one of the largest suppliers of high-quality single-family rental homes in the U.S. Renters in Progress Residential’s homes who share the furlough letter they received or otherwise furnish proof of employment with an affected government agency will be eligible to work closely with the company to defer January and February monthly rent obligations.
“This is a unique nationwide situation, and we view it as an opportunity to demonstrate how deeply we appreciate the work that our civil servants and military men and women do for our country ,” Chaz Mueller, Progress Residential CEO, says. “We recognize the hardship that many of our residents may be facing due to the government shutdown and want to alleviate the anxiety those families are facing.”
Asked if the company still expects rent to be paid by a specified date, Mueller was unequivocal. “Along with the rest of the country, we are watching and waiting for our nation’s leaders to resolve the shutdown. At the same time, we continue to work with affected residents to schedule deferred payments for January and February rent.”
Metro DC Properties
The Bainbridge Companies, an owner, developer and manager of luxury rental properties in Florida and the mid-Atlantic states, has taken like steps to help federal workers. Because the organization owns and manages numerous District of Columbia-area communities, its officials recognize many residents are federal employees suffering through the furlough.
The company is waiving late fees and working individually with residents who require the assistance to implement payment plans. Regional vice president Troy Fields reported that to qualify for assistance, government shutdown-affected residents are asked to visit the leasing offices of the communities at which they live and share documentation they have received from the federal government regarding their furlough, or alternatively a recent pay stub showing a paycheck of $0.
Meantime, the federal government shutdown is leading some apartment industry experts to re-examine need for security deposits.
The shutdown has cast a disturbing light upon the grave financial circumstances faced by millions of Americans. The Federal Reserve has reported 40% of Americans cannot cover a $400 emergency, says Reichen Kuhl, cofounder and CEO of Marina Del Rey, California-based LeaseLock, which replaces security deposits with insurance.
“This is an extremely sobering fact about the state of our country,” he noted. “Affordability is a real issue for many renters and as such apartment operators should consider becoming zero-deposit properties by eliminating security deposits. While many renters can afford their monthly rent payment and other monthly fees, many find it difficult to pull together the funds necessary to make a security deposit payment upfront. This upfront expenditure is an added stress to renters and can negatively impact their ability to afford quality living.”
Replacing security deposits with monthly lease insurance enables property managers to close more leases, more quickly, helping keep occupancies high. As well, becoming a zero-deposit community eliminates the administrative burden and expense of managing a security deposit.
“It also does away with the anger and bad feelings residents frequently experience when they inevitably receive less of their security deposit back at move-out than they were expecting,” Kuhl said.
A major Emirati property developer believes Dubai’s property market has bottomed out — but says there remain at least two more tough years ahead before a full rebound.
“2018 has been a difficult year, prices have come down, sales have come down, and I think ’19 and ’20 are going to be also not easy years,” Hussain Sajwani, chairman of Dubai real estate heavyweight DAMAC Properties told CNBC’s Hadley Gamble on Wednesday. “I think we are at the bottom, from a price point of view, but it will take at least two years to absorb the supply.”
The UAE’s commercial hub has suffered a bruising year, with Dubai’s stock market the worst-performing in the Middle East, a fall in tourism and record drops in property sales. Property sector analysts say the city has been overbuilding, and with weak demand for all the newly built homes and apartments, property prices have been tanking. Residential prices in the emirate of 3 million have fallen by some 15 percent since 2014.
A report by real estate platform PropertyFinder published last November predicted a continued slide for the sector in 2019, as supply is expected to double or even triple while demand remains subdued.
Sajwani described a “beautiful five years of growth” at the start of the decade that saw prices going up, and emphasized his belief that the city would stage a comeback.
“Dubai is very resilient, from the long-term growth. It’s always going to go through the cycle,” he said. “As a free capital economy, you know, people are going to overbuild, and then going to catch up. And the leader is very open-minded,” Sajwani added, referencing the leader of Dubai, Sheikh Mohammed bin Rashid al Maktoum.
“He doesn’t want to restrict the supply or the demand. He says, ‘Let the supply-demand naturally take its place. No point of control(ling) the supply — let everybody manage as a normal economy’.”
DAMAC, with an annual turnover of some $2 billion, was the first Middle Eastern real estate company to list on the London Stock Exchange. The company reported its worst quarter of booked saleslast April-June with a 46 percent fall in profits. Still, the company’s leadership predicts a cyclical recovery and has plans to continue expansion in the Middle East, Africa, the U.S. and in Europe in particular.
Sajwani predicted similar levels for profits in 2019 and 2020, but stressed that the company’s focus now is on streamlining costs and finding opportunities to grow in overseas markets. London is a bright spot on the chairman’s radar — and not in spite of Brexit, but because of it, thanks to a dramatic drop in the value of the pound.
“We like London, we have experience in London,” he said, describing a 50-storey tower slated to be completed at the end of next year. “We see, in Brexit issues, a great opportunity, as (the) price is going to correct, the pound has come down really drastically, and we’re waiting for an opportunity to invest in London, and we want to go in a big way in London.”
And Sajwani described interest in a number of real estate sub-sectors, pointing to mixed-use property, luxury apartments, office buildings, and retail. “So we’re looking at property from all the angles, and we’re willing to write a big check and go in a big way in London. We believe in London,” he added.
There are many ways of becoming a real estate millionaire. It is possible to inherit lots of properties and thus become an instant property millionaire. This is not the norm and although a few people will experience this, several others will not experience such a bequest.
We are interested in those who slowly and strategically built wealth through real estate. We are even more interested in those who have documented or shared their experiences so that we can learn from them and apply their time-tested principles. We will unpack a few of those lessons that we have learnt from this select group.
Successful real estate investors are long term thinkers. They have a long-term perspective when evaluating investments and when planning their future. Many people think in short-time frames. Some even think daily believing that any day apart from today is not worth planning for.
If you want to be a real estate millionaire, you must start thinking in at least a 10-year perspective. An area may look unattractive today but what is the possibility in 10 or twenty-years time? Real estate investment has proven to be one of the most stable and rewarding long term investment vehicles even after experiencing short periods of downturn.
Real estate millionaires often operate like bargain hunters in other sectors of the economy. They love to buy properties when others want to sell. They love to buy properties less than its actual value. They love to buy distressed or discounted properties.
The interesting thing about this is that they aim to start making money on their property purchase from the start. When you buy a property at a discount, you make an immediate gain and also hedge yourself against any downturn in the market. It is a strategy for ensuring that you are properly positioned to make more money than the average investor the moment there is an upswing in the market.
Someone once said that many look but only few truly see. In real estate investment, this is very true. Experienced real estate investors can see opportunities where many can see nothing but problems.
This select group go out looking for strategic value that might not be obvious to the property seller. A strategic advantage in a property or piece of real estate could range from size to location or design. A strategic advantage is anything that is unique to the property that cannot be easily found or seen in any property in the same location. A strategic advantage could be a key difference in the property when compared to other ones that could make it a game changer when unveiled.
Another secret of real estate millionaires worth noting is their focus on investing in a tested market that has a long history of capital growth and appreciation. Those with very little knowledge of real estate investment often criticise or mock some investors investing in some highbrow areas on the premise that the amount they have invested or intend to invest in those areas could buy several lands or build several houses in other places.
What is hidden to the critic is that although some areas are very expensive today, they have a long history of capital growth and will certainly grow in the future except something out of the ordinary happens. These areas are tested markets where the demand is always more than the supply. Some of these areas can only be accessed by those with lots of money and the value will continue to grow. Real estate millionaires always ensure that they have a sizeable number of their properties in these areas.
Value can also be manufactured if you can see the possibility. Many real estate millionaires have been created through this means .The ability to look at a location or a property and see how to create value from it has always been part of the secrets of real estate millionaires.
This is one reason why refurbishing or renovating properties has always been a means of making money for those who understand it. A real estate investor could approach a property owner who has a derelict property in a strategic location but has no money to refurbish or rebuild it and offer to rebuild it for him or her on clearly agreed terms. By the time the renovation is completed the property is often distinctly different from what was there before. The property can now easily command greater value.
Finally, astute real estate investors are good at using leverage. Leverage is a means of maximising limited resources to gain significant advantage. Leverage includes using a small savings supported with proper documentation to raise money from the bank that you then use to purchase a property which ordinarily you would not have considered. However, if the property is sold, you’ll benefit as if you had put down the entire purchase price. This alone will boost the possibility of your making big money in real estate.
London maintained its position as the top city for global real estate investment in 2018, according to research published today by JLL (NYSE:JLL). Investors continue to favor cities they are familiar with and that have well-established investment markets and high levels of transparency.
Well-known, large gateway cities with the world’s deepest concentrations of capital, companies and talent continue to dominate the top ranks. Twelve cities–London, New York, Paris, Seoul, Hong Kong, Tokyo, Shanghai, Washington DC, Sydney, Singapore, Toronto and Munich–have appeared in the top 30 ranking every year for the past decade and account for 30 percent of all real estate investment.
The data shows that total volumes in 2018 were $733 billion, up 4 percent from 2017, the best annual performance in a decade. Cross-border purchases accounted for 31 percent of activity in 2018, close to the 10-year average, suggesting investors still have appetite to buy outside their own markets.
Richard Bloxam, Global Head of Capital Markets at JLL, said: “In a year when investors have had to deal with increasing populism, protectionism and political uncertainty, the appeal of real estate as an asset class has continued to increase. Interestingly, investors remain focused on gateway cities, despite tight pricing. Many are looking at alternative or emerging locations, as well as varying real estate property types within these cities, rather than exploring other less familiar cities. A notable trend is that half of these established gateway cities are in Asia Pacific. Increasing transparency in these markets is encouraging more investment, moving these cities even higher up the rankings in 2019 and beyond.”
Expectations for 2019
JLL projects that investment activity momentum will be maintained into 2019, as real estate continues to look attractive in comparison to other asset classes. Fundamentals in real estate remain compelling, despite historic low yields, as robust corporate occupier fundamentals across most markets are leading to positive returns. As such, investment activity may slow, but only marginally from its current high, as investors look to hold their real estate exposure and become more selective in the search for assets with strong income growth.
The institutional real estate universe will continue to expand, driven by factors such as low volatility, diversification benefits, long-term income and an attractive pricing premium to core sectors. Asset classes such as student housing, senior living and multi-family have continued to attract more institutional money in 2018 and this is likely to continue in 2019.
Industrial now accounts for 17 percent of all investment, up from 10 percent in 2009. In contrast, the retail sector has seen less activity as investors adjust their investment approach to reflect changing consumer behavior. In gateway cities, the office sector tends to account for a higher proportion of investment volumes—68 percent in 2018, compared to 51 percent in global volumes.
The top 30 will continue to be dominated by the gateway cities in 2019. However, at the edges, investors will consider a widening range of cities in their strategies. Reflecting real estate investors’ risk appetite, secondary cities in established transparent markets, such as Osaka and Atlanta, are likely to attract more attention, as opposed to moving into entirely new countries.
Yields are now at historic lows in most markets across the globe. A sharp correction is unlikely, as there is still a significant weight of capital looking to invest in real estate, and corporate occupier market fundamentals across many markets are positive. This creates the potential for continued income growth. However, in 2019, overall investment volumes are expected to fall approximately 5 to 10 percent below the 2018 total, driven by a slightly reduced appetite from investors to sell, as well as continued selectivity in acquisitions.
“The latest decline is harder to explain. Perhaps it is the decline in consumer confidence that’s been occurring in the latter half of 2018,” said Lawrence Yun, chief economist for the Realtors. “The latest numbers do not reflect the lower, current mortgage rates compared to the November figures, so it’s really harder to explain.”
The supply of homes for sale also rose just more than 3 percent compared with a year ago. Low supply had been holding sales back last spring, despite strong demand, so it would make sense that more supply would boost sales, unless this is a sign that demand is weakening.
“This weakness is certainly due to the sharp home price gains along with the rise in mortgage rates,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Affordability has been blamed for slower sales over the past six months, but sales in December matched the same pace as in 2000, and Yun argues that affordability is better now.
“Today it is actually more affordable compared to year 2000, yet we have about 20 million more jobs, so for home sales to be roughly equivalent means that in 2018 there is an underperformance of the overall housing sector.”
That underperformance cannot be blamed on the partial government shutdown, as most of these deals would have been signed in October, well before even the threat of that. It also cannot be blamed on stock market volatility, as that didn’t really kick into high gear until mid-November.
Interest rates did move higher in October but started their slide lower in November, and rates were higher in September as well, so it wasn’t a sudden jump. Rates are also still historically low. In fact, mortgage rates in 2000 were twice what they are now. Of course home prices were lower then.
“While positive demographics and a solid job market would normally offset this relatively modest rise in mortgage rates, it’s been about 10 years since mortgage rates have been as high as they were at the November peak – suggesting that there is a larger share of current homeowners who feel they are ‘locked in’ at a lower mortgage rate … reducing the number of them who would be looking for a home at a higher mortgage rate,” said David Berson, chief economist at Nationwide.
If anything, the drop may be due to the fact that home prices are actually falling in some areas, especially in the West, and in the rest of the nation the gains are shrinking. That makes it easier to afford a home, but less desirable if potential buyers are concerned that their new home’s value will immediately depreciate. No one wants to catch a falling knife.
The median home price of $259,100 in 2018 was the highest on record. While mortgage rates did drop in December, the expectation is that they will move higher this year, and that will hurt affordability further.
“Looking ahead to 2019, expect weaker existing-homes sales as the new year ushered in a government shutdown and worsening economic uncertainty,” said Cheryl Young, senior economist at Trulia.
California is always different, somehow always better or worse than the rest of the country.
This year there are two Californias. One that’s not much different than the rest of the country and one where real estate markets must be watched very carefully because home prices are getting into bubble territory.
We used data from Local Market Monitor, Inc. to build a table to show the split. The top half lists nine markets where home prices are 25 percent or more above the “income” price – a calculated price closely tied to local income that’s been an infallible predictor of bubbles. Over-priced marketsalways come back in line with the “income” price, sometimes by stagnating for while the “income” price catches up, sometimes by falling very sharply two or three years in a row.
The reason these markets are so over-priced, of course, is that the local economies have created demand for housing much faster than builders can produce new supply. In the Bay area the high demand is due to the rapid development of technology industries, especially because they produce a lot of high-paid jobs. In the LA area – where average home prices are much lower – the lack of construction over the past decade is the main problem.
A slowdown of the national economy – which I think is very likely in the next two years – will affect the most over-priced markets the most. In the Bay area, companies will shed high-priced engineers, which will have the greatest effect on higher-priced real estate. In LA, jobs will be affected more generally but real estate will feel the effect most in the outlying residential markets like Riverside-San Bernardino.
So, what should you do in these over-priced markets? Our ability to predict the exact moment a market will go bust isn’t very good – you therefore need to think more about managing your risk now rather than timing your moves later. If you’ve been thinking about selling property, think sooner rather than later. If you’ve made a long-term investment and can ride out a dip in prices, don’t worry too much. If you’re flipping properties, shorten your time-horizon. If you’re investing in rental property, stay away from the upper end.
For an actual bubble-and-bust I’m most worried about San Francisco itself, already heavily over-priced and with prices up 14 percent in the past year, San Jose, where job growth remains very high, and Riverside-San Bernardino, which is always the tail of the LA dog.
The eleven markets in the bottom half of our table aren’t immune from a fall in demand but the risks are lower, so investors have a wider range of options.
With the exception of Santa Maria, all have job growth that is at or above the national average rate. And home prices in the past year were up between 5 and 11 percent. These are signs of good growth in demand for housing, as long as home prices don’t stray much above 20 percent.
In these markets a slowdown won’t hurt home prices very much, so you can make just about any kind of investment – rehab for resale, single-family rentals, splitting single-family homes into multi-unit rentals, flipping properties, apartments.
In Stockton, Modesto and Salinas, where demand is partly tied to the Bay area – which is why prices have been rising sharply – investors should stick to rentals in the “target rent range”, which extends from the average monthly rent to about 25 percent higher. This is where you find the largest concentration of renters – an important consideration when demand slows.
And in the those markets where job growth has been slowing the most – Salinas, Modesto, Sacramento, Santa Maria – rental investors should restrict themselves to recession-resistant locations near colleges, medical centers, retail centers, government offices.
California remains the land of opportunity, but also the land of boom and bust. This year investors can still find opportunity there but need to carefully check the risks.
Diversification is a solid strategy to reduce risk in your portfolio. Risk is an inherent element of any investment, of course, and there are few better examples than real estate, but a little selectivity can go a long way. If you invest in this year’s most promising sectors, you’ll minimize your losses and maximize profit.
Nothing is guaranteed, but research has shown that the five real estate markets in this article have enormous potential.Investors should take note of the opportunities detailed below and assess how senior housing, student housing and other sectors might factor into their plans for 2019.
PwC’s Emerging Trends in Real Estate 2019 Report claims that the senior housing sector will prove profitable for both investors and developers in the new year. The market is likely to grow as shifting demographics drive demand for nursing homes, independent living units, assisted living facilities and long-term care facilities.
Recent data and statistics support PwC’s report, as the number of Americans 65 and older will reach 79.2 million by 2035. As the Baby Boomer generation ages, investors should take the opportunity to research senior housing developments, investing in newer properties with modern amenities if they can find them.
It’s necessary to include the caveat “if they can find them” because the inventory of senior real estate properties is comparatively old beside other sectors. A disconcerting 58 percent of the stock is more than 17 years old, and 32 percent is more than 25 years old. Still, developers can make senior housing—and even nursing homes—a priority.
2. Growing cities
Growing cities such as Cleveland, Silver Spring and Fort Lauderdale all show promise in 2019, reporting rapid growth and high demand. For instance, home prices have been rising since last year. Since home prices are generally an indicator of demand for houses and rental properties, signs are good.
Investors working within the limitations of a strict budget will also find these markets easier to access. They’re not over-priced, and the greater availability of properties in attractive locations makes these areas an appealing investment opportunity. Still, strategies will differ from market to market, and caution is necessary.
Any investors interested in finding a property in a growing city should look for areas where the rent doesn’t go more than 25 percent above the average. Staying within the Target Rent Range is advisable, as it’s where investors usually find the highest concentration of renters, which is crucial during a recession.
3. Student housing
Real estate investors have a complicated relationship with student housing, and their hesitance to enter the sector is rational. The attitude and lifestyle of college-aged tenants often result in property damage and conflict. That said, investors who work past these problems tend to enjoy a broad spectrum of benefits.
The rising cost of room and board has made off-campus housing attractive to students—it’s now an average of $2,238 less per year,than on-campus living. Investors who purchase multifamily properties see high demand, along with stability through recessions and consistency through periods of market volatility.
Investors with properties in the student housing sector can also expect to see consistency across the board since lease renewals are often easier to obtain. Students usually know in advance if they plan to return to school the next year, which allows for a degree of predictability that’s absent in other sectors.
4. Suburban areas
Urban revitalization in smaller U.S. cities has attracted attention to the suburbs. Millennials are the driving force behind this transition, and investors should take note.
The millennial generation makes up over one-in-three American workers. Therefore, the priorities of this valuable demographic become essential to understand. As they begin to show greater interest in single-family homes, the suburbs show substantial potential
Investors might have a certain image in their head of a young, single bachelor when they think of millennials, but this picture is far—and getting farther—from the truth. Many millennials are choosing to settle down and start families, and as the demographic ages and evolves, the housing market will reflect their preferences.
5. Commercial properties
Investors who are familiar with residential real estate may hesitate to consider commercial properties,but evidence supports its profitability in 2019. An improvement in industrialization and trade opportunities, the introduction of Real Estate Investment Trusts and the popularity of co-working spaces are all affecting demand.
Co-working spaces, in particular, have taken center stage, and the industry’s rapid growth makes commercial properties with flexible design a top choice for investors. With the flexible space/co-working sector expanding, the future for commercial real estate is bright.
If it doesn’t exceed their budgetary limitations, investors should seek and purchase modern commercial properties that incorporate flexible design elements into their space. These features include movable desks, adjustable walls and other furnishings that allow for simplified rearrangement and new configurations of a work area.
Mitigate risk and ensure profitability
Investors who research and review the five markets detailed above can mitigate risk and ensure the profitability of their portfolios. Although their success depends on variables outside of their control—and beyond the speculation of experts—certain sectors in real estate show promise in 2019.
Senior and student housing, growing cities, suburban areas and commercial properties deserve attention moving forward. Investors should look into these opportunities today.
JAPAN-BASED Pressance Corporation Co Ltd, a top-three developer of condominium projects in Osaka and other Japanese cities, has expanded its business to Thailand, where it holds a 25-per cent stake in a joint venture firm with Shinwa Real Estate (Thailand) Co Ltd and Prebuilt Plc.
They will this year develop their first condominium project in Thailand, Ren Sukhumvit 39, worth Bt2.5 billion.
“Thailand was the second country in Asean where we have invested in a condominium project after our expansion to Vietnam last year,” Pressance Corporation Co Ltd’s manager of business development, Tatsuya Nakae, said in a recent interview with The Nation.
He sees great potential in developing condo projects in Thailand, due to the country’s heavy investment in infrastructure. The rapid expansion of mass-transit rail projects in the country’s major cities, is a particular inducement for residential developments close to the routes.
“We entered Thailand by setting up a joint venture with our Japanese partner, Shinwa Group, which had expanded their presence to Thailand in 2017.This boosted our confidence with our investment in the country,” he said.
Since their first project, Ren Sukhumvit 39, Nakae said the company has continued its interest in further investment in Thailand with its partner, Shinwa Group. Decisions will be based on market demand.
Tomoyasu Yamabe, director of Shinwa Group and managing director of Shinwa Real Estate (Thailand) Co Ltd, says the company is following a business plan to invest Bt8 billion in Thailand in 2019 and 2020, and may ask Pressance Corporation to become a partner.
Pressance Corporation Co Ltd developed 5,200 condominium units in Japan last year and has recorded total sales above Bt30 billion yearly.
Pressance is the latest property firm from Japan to have expanded its investment into Thailand.
No, says a former President of the Nigeria Institution of Estate Surveyors & Valuers (NIESV) and Principal Partner, Bode Adediji & Partnership, Mr. Bode Adediji. Rather, he suggests that the country should use the Pension Fund as a first tier finance for real estate development. He believes that overhauling of the Land Use Act as well as ensuring a sound mortgage system, including effective policies on housing, will go a long way in tackling the over 17 million housing deficit afflicting the country.
What is your opinion on asset declaration provision and the Code of Conduct Bureau? Of recent, top civil servants and influential politicians have fallen foul of this particular requirement. What is your opinion on this?
The challenge we have is what is generally with us. As a people, we are not lacking in laws, guidelines and policies, but the implementation of stipulated laws and policies is where there is a challenge. When agencies are set up to achieve a particular noble cause that will benefit the people, the compliance level is usually very low. The functions and provisions of the Code of Conduct Bureau should be sacrosanct to political office holders, civil servants and, indeed, any category of persons, who by law, are required to abide by its status in preventing or sanctioning corruption in the country. It is an area of our constitution that must not be taken for granted because it defines a lot of things about us as a people.
The continued existence of the Land Use Act is said to have cost the nation about $300 billion. Do you agree that this Act should be repealed or improved upon?
It has been a matter of controversy since it was enacted. If there is any document or law that would have propelled us from a third- world country to a developed country, it would have been this piece of law in terms of assets own culture. The Land Use Decree struggled that to bring normalcy to land ownership, it ensured that rights, entitlements and titles to land was not trampled upon. But, unfortunately, governments in different states rather than deploy it as income generating, have influenced peddling and generating undocumented income either to themselves or cronies, stripping it of its original idea and thereby making the whole essence of the Act defeated. This hampered the efficiency and delivery on its mandate. The clamour to repeal or discard it in my mind is an attempt to throw the baby away with the bath water. For us in the Nigeria Institution of Estate Surveyors & Valuers (NIESV) and at individual levels, we are canvassing for the overhauling of the Act and fundamental amendment to those areas we find not workable. The position paper on this is in the closet of the National Assembly and until we have a government that is concerned with the development of the real estate sector, justice will not be pursued and done to stimulate the private sector.
There has been a preponderance of rental defaults. What is responsible for this?
Once there is prolonged recession like we have had, it affects political, moral and institutional aspects of our national life. The economy is in recession and when there is recession people grapple with a lot of things, such as financial, social and other challenges. Fundamental areas of people’s lives are affected during recession, including the ability to house themselves, pay their children’s schools fees, feed and generally meet their immediate needs. However, many countries have fashioned out how to deal with this kind of things because some people can hide under this to shun their obligation because paying your rent is an obligation. No doubt, there are insensitive landlords who increase their rent yearly not considering the difficulties they may be putting their tenants, but on the other hand, some recalcitrant tenants refuse to pay their rentals even while buying new cars, these are realities in third world countries. But we can learn from how other countries came out of that particular situation. Some countries have come out boldly to fashion out rules and regulations to identify those who might want to hide under recession or economic hardship to avoid paying their rentals. However, in a situation where there is a national malaise of indiscipline such as ours, some tenants will want to stand up to their landlords without paying, the landlord suffers more, though some landlords also increase their rent unnecessarily without a care.
Some years back in Dubai and Abu Dhabi, when there was tendency for tenants, where tenants move into a place and refuse to pay nor moving out of the property, the government set up a process and guidelines to resolve such impasse. The government also put in place the machinery to resolve such and to discourage tenancy disputes in conventional court, I think that is what Nigeria needs. In extreme case like that of Florida, USA, if a tenant owes his rental and the landlord fails to collect his rent as a result of the reluctance of the tenant to pay, the local government will intervene to ensure that justice is done by investigating if the man has lost his job or debilitated by illness. Upon satisfactory investigation, the government will compel him to pay or vacate the premises.
There seems to be property glut in the market, such that is a huge number of vacant properties adorning the country’s landscape. What is responsible for this?
The proportion of the glut in the market is not directly as a result of the recession per se. Largely speaking, it has to with our collective lack of foresight. Real estate investments and projects are always seen in all countries as a medium to long term projects. But where we see that the rate of economic growth and the migration of people from certain income class to another is either not improving but retrogressing. In this scenario, building for a particular class of people, which may be referred to as endangered species and also for people you cannot foretell their abilities to take such products in the near future, for me, is the main problem that we have had in Nigeria. So far, those who are building are building for a class of people who are either expatriate staff coming or people migrating from low to medium and high-income areas to premium areas. For these set of people as soon as there is recession there will be no effective demand for such products.
To avoid this, developers and real estate investors like other businesses, should be proactive and futuristic in concept, planning, financing, development and construction. If a developer goes to a bank to borrow money to build luxury estate for a class of people that are no longer available or dwindling, then such developer is courting crises from day one. On a specific note, the way I see the country and, particularly Lagos State, is that they have failed to embark on complementary services that would encourage private sector participation in real estate development. There are things the government ought to have done to provide an enabling environment for the private sector to ensure that whatever product is rolled out by the private sector, the burden of infrastructure development should be taken away from them. Such infrastructural provision of power supply, road network, and water adds cost on the final product and by extension it becomes unaffordable to some categories of tenant that would have expressed interest on such product.
Lagos, unfortunately, has been encouraged to develop on the platform of mono axis. There was a time and largely speaking, that is, still the case where the residential outlook focused on the Lekki/Epe axis to the neglect of other areas such as Badagry and other areas that are not fully developed in the state or even encourage developments outside the state, such as in Ota, Ogun State and the Lagos-Ibadan Expressway. But because this was not done it caused a lot of environmental and physical anomalies that is so evident in the real estate development in the state. People trooped to build in the axis, but the income and unemployment level continued to dwindle in building for the class of people that are not available to take up such properties.
Where is the vacancy challenge more pronounced – in commercial office space or residential accommodation?
Location by location, I would say. If you look at Ikoyi, for instance, predominantly, most of the first class office spaces are empty. But where you have small scale office spaces, the percentage of void is less. Victoria Island and part of Lekki is passing through a transition where largely speaking even residential areas are transformed and converted to office use. Whenever you have recession the first target that is hit is commercial office space because recession always brings about sporadic business closures and when you close down you close down. The highest rate of failure for upstart companies normally happens during recession and so if you have built for people who have just taken off, the response from the market feedback is that there is no effective demand for such a space.
What would you recommend to a real estate developer in Lagos?
My position is that a-would- be developer should select his location carefully and professionally. The mere fact that you want to join the bandwagon of Lekki/Epe axis developer does not mean that you should neglect other areas where you have ready or emerging markets. Generally speaking, people cut their coat according to their cloth. The tendency to build all these five and six bedroom flats, terrace houses should be curtailed. Families now prefer two or in maximum cases three bedroom flats and in some cases, mini-flats, where common services can be shared. The other one that is important is that the idea of encouraging individualistic self-development approach in real estate is a problem on its own. Nigerians have forgotten to implement what we learnt in school known as the economy of scale.
In many countries, the role of building where a man is going to live has been shifted from his neck to that of developer but in Lagos today and many parts of the country, the individualistic housing development is still the main focus of every one. In a situation where you have developers in different categories of small, medium and large scale then the burdens and cost associated with individuals building their own houses should be transferred on their necks and the prices will go down, the ability to pay the rent becomes enhanced. But as long as we allow individuals to acquire their land and struggle to build it on his own even when he is able to build one or two units and let one out, the proportionate cost becomes so high that prospective tenants cannot afford it. Where you have large scale housing, construction cost per housing goes down and expected rental income from such rental property becomes modified.
People, for some reasons and belief, want to have this satisfaction that they built their house themselves. What is your take on this?
I agree with that because it is a cultural problem, but for how long should we run our lives based on cultural inclinations when you know it is a problem? Shouldn’t we borrow the good things from overseas just as we borrowed their education? Why can’t we borrow their culture that subscribes to communal project development and living? I think that is the way Nigeria should go. In fairness there are so many companies currently that are specialised in small, medium and large scale housing estate development and they have been successful. What the government should have done is to focus her attention and place more emphasis in terms of how they allocate land, roll out infrastructure etc. But what we have is that some private and government lay-outs and individuals are encouraged to do their designs, seek their contractors or construct themselves, costs begin to rise and rental expectation will not be met just like we are witnessing.
Wouldn’t it be as a result of not having a functional mortgage sector?
There are so many problems associated with it and mortgage system is part of it, including the Land Use Allocation Policy. It should be done in such a way that a particular registered developer would be assigned terms and conditions to roll out specific projects within a specified time and to be able to sell to those who have access to mortgage. This will ensure that the nation’s housing problem is being looked at in a very holistic manner and the result is we will be successful at the end of the day.
Why is there a preponderance of quacks in the real estate sector? Some stakeholders attribute this to the fact that would be clients prefer cheaper agency fees compared to the registered agents who insist on 10 percent commission for their services?
I don’t think that observation is correct. There are several reasons why clients patronise more quacks than registered surveyors. Firstly, the percentage of registered surveyors vis-a-vis potential customers is disproportionately low compared to the prevalence of quacks. If for example a prospective client’s first access is to a quack, then that is where he will go. I cannot think of any registered surveyor’s firm that is still very rigid on the percentage of professional fees that should be paid. You can do that during the boom but not now, nobody that is realistic can insist on that during recession as we have it now. Really, quackery will continue to grow in this country for so many reasons including lack of good job opportunities. The increase in the retirement patterns of able-bodied men and women in many respects particularly in urban centers has fuelled the practice. You cannot find an able bodied young man sitting down and idling away when he knows that he can print complimentary cards to persuade, encourage or deceive somebody to give him an assignment to go and look for a house; for these set of people their first port of call is foraying into petty trading or quackery in consultancy. These set of people by their modus operandi have greater mobility and accessibility. For as long as you have this kind of recession in Nigeria, it will spring up a large quantity of quacks because again, they have more fighting spirit than the registered estate surveyors, they are aware that their sustenance and livelihood depends on how hard they work.
Are you satisfied with engagement of the private sector with the government in terms of housing provision?
In terms of patronage and engagement, there has not been any government in the last 30 years that is pro-professionals and my challenge is that until professionals find themselves in the corridors of power and within the government apparatus, we should not expect a change in the way that the government relate with us. I suspect that if there is no change, the neglect that we suffer from government will continue to rise. But, for example, if an estate Surveyor and Valuer becomes a Senator of the Federal Republic of Nigeria tomorrow, his perception of the housing crises will be different. Again, if a registered Town Planner, an Engineer, or an Architect becomes a President or Chief of Staff in the Presidency, the kind of reception he will give to professional opinions in critical matters of housing and urban development will be different. Until we have that setting and avoid walking far away from the corridor of power, it means that we can only talk while other makes the difference.
There are so many abandoned Federal Government buildings especially after the movement of the Federal capital to Abuja? Why have they not been put into profitable use rather than allowing the buildings to rot?
There are some of them that are still going through legal dispute or crises while some seen physically as belonging to government has actually been sold. An example is the Federal Government houses at Bishop Oluwole in Victoria Island sold over 10 years ago. I will not blame anybody who bought and refused to do anything about it. But the abandonment is a sad development especially for a country that says it wants change and is pro-development. I have not seen any fundamental change in government policies concerning abandoned projects and properties all over the country in concrete terms. I have never seen any government in the last three or four regimes that has actually factored in their calculus this vibrant sector of the economy that can be used to check youth unemployment. If a government is pro building and pro development, people who leave school and trained as architects, engineers, technicians can actually have a place to go and work. Not only that, majority of Nigerians in Diaspora who have capacity to buy houses, if there is a functional mortgage system can expand that. But the truth of the matter is that it has never been part and parcel of any government policy to see housing intervention beyond the clamour to say we are putting roof on peoples head to embrace a more serious and wider goal of empowering people by providing employment for the young people. Once we have that, the Land Use Act perspective will change including the treatment of the Pension Fund that has accumulated to over N8 trillion. Things like entrepreneurship support system will change. The last one that I know that we talk about always instead of addressing the challenge is looking into the architecture of our housing problems and solutions to the extent that we have spoken about our concentrating on what we have to build rather than the dependency on foreign products which has been on for the past 50 years.
Is it possible to have a ‘Made-in-Nigeria house’?
Until we take a look at the local building materials we have and enforce it on people to build houses, housing cost will continue to rise and decent housing may continue to elude a greater percentage of the people. We can ensure that 80 per cent of the material to be used to build anything in Nigeria is made in Nigeria if we have the political will. New technologies will be encouraged, no doubt, to ensure that our timber in the forest accounts for 70 per cent of our building materials either in terms of our walls, windows or floor . If other countries have done this successfully, we must not attempt to reinvent the wheel.
What best use can the Pension Fund be put into judging from the fact that it runs into trillions of Naira now?
Pension fund can be used to take care of short-term housing needs. As at a year ago, the Pension Fund managers were prohibited from engaging in long term investment. But I believe that there can be improvement on that law by categorising for instance, some real estate development that can take about 24 months as not too long a time to fit into the laws that set up the fund. Where there can be a certainty I believe and advise that the idle fund in the Pension purse should be deployed into housing provision with short gestation period. It’s not for real estate financing that can take 10 or 15 years it can even be used as first tier finance for a particular project. It is when a nation cannot take a creative look into what their challenges and concerns are that makes the problem to persist. Look at the issue of dearth of hostel accommodation for students in the universities, why can’t the government encourage developers and assist them by making it possible for them to draw from the fund to build hostels; no doubt, the students will pay and a great need would have been met.
Why are people holding on to the concept of family houses, abandoning houses for years and living them as relics instead of earning rental income from them?
They are littered all over the place and that is an area I have never seen a government agency looking into. Those in the villages, historically and culturally, are understandable. For instance when Mr. X was making waves he lived in Abuja and went home to build a house but unfortunately the same Mr. X never encouraged his children to holiday in the village. Unfortunately when he passes on, it becomes automatically an abandoned country home occupied by cockroaches, lizards and snakes because the focus of his children are different. In this country, we lay more emphasis on entitlement policy as far as heritage is concerned than transforming a particular asset into functionality and utility. That is why you find out that most personal houses and buildings abandoned are underpinned by family squabbles. Those without family squabbles don’t have capacity to transform them into money yielding asset. It is a whole gamut of challenges that make the concept of family houses embarrassing and prevalent. It is important for government to find a way of encouraging some NGOs to go into advisory services that people can tap into where for example a family of three or four is having a squabble over a property they can be advised as to the channels they can explore raise fund and the kind of property they can redevelop the building into to yield income and everybody will be happy. In a case that the children are all abroad they and have no confidence on their relative they can be advised to appoint an independent estate management advisory agent to manage the property. The only way we can achieve the objective is for government to see the loss encountered by these families as not only theirs but that of the nation in general.
Why is the Federal Secretariat in Ikoyi still abandoned?
I don’t have information on why the Federal Secretariat in Ikoyi is still the way it is now that we have the same political party in Lagos and Abuja. Whatever may have been the crises before now on the management of the property ought to have been resolved because at the end of the day, it is not only the developer, the state and Federal Government, but the entire that is losing through the abandonment of such strategic and massive asset.