Remote work has been an evolving trend well before the pandemic. Even, prior to lockdowns, 4.7 million people were already working remotely as employers recognized they could hire talent from all around the world while reducing overhead costs. In this article, we’ll discuss how remote work is affecting real estate markets to provide investment insights, and also give an idea as to how seemingly simple work habits can impact this market.
Different Priorities
Remote work gives people the option to purchase larger homes in their preferred locations. Narrowing searches down to a 30-60 minute drive radius of the workplace is no longer necessary, so buyers are now able to consider purchasing homes located in more rural or suburban areas with more affordable real estate prices, better schools and less crime.
Although not all businesses have shifted towards a 100% remote workforce, many have become partially remote. Since these workers typically only go into the office a few days per week, they can relocate a little further away from the office to enjoy more space and value.
Essentially, many people are looking to live permanently in their favorite vacation spots, because they can! However, this trend is not expected to lower the prices of real estate in major city centers, which remains in high demand, due to their big-city amenities and job opportunities.
Home Offices
More home space is not only required for the much-appreciated breathing room, but also to accommodate home offices. Although this trend emerged well before the pandemic, it has notably and understandably accelerated.
Home workspaces that cultivate creativity and focus are becoming increasingly sought out.
Remote Real Estate
The real estate industry itself is also becoming increasingly remote. All of the necessary technology enabling remote real estate already exists, such as virtual tours, digital documents and signatures, online rent collection portals, online tenant screening, as well as online contracter communication.
Everything related to real estate can be done remotely, and these tools will only become more accepted and easy to use moving forward.
This also means that investors can invest remotely and manage their properties from afar, increasing the geographic scope of real estate investments, especially in states that are landlord-friendly and don’t have property taxes.
Remote real estate helps investors seamlessly diversify their real estate portfolios, making themselves more resilient and ready to cope with a variety of economic outcomes.
“Lost” American Markets and Homes will be Revitalized
Cycles exist in every industry, and real estate is no different. In 10 to 30 years, it is not out of the question that American cities that were once significant economic forces become sought after on large scales once again. These cities were once hubs for manufacturing and industry.
Right now, though, these “gateway cities” (once gateways to the American Dream) are home to class C and class D properties, which are currently less desirable due to the need for repairs, poorer school districts, and more frequent tenant turnover. However, as remote work becomes increasingly popular, it is likely that remote workers will see opportunity in these areas with properties below market value. Many gateway cities already have walkable urban centers and public transportation, attracting those coming from much larger cities who do not want to make significant adjustments to their lifestyles.
A Shift from Commercial to Residential Investment
As remote work lowers the demand for commercial real estate and e-commerce reduces the demand for brick-and-mortar stores, many investors that previously prioritized commercial real estate are shifting their focus towards residential properties with high potential.
This trend also means that distressed commercial real estate will be widely available, and has the potential to be repurposed for apartment buildings or other enterprising endeavours.
Nationwide BURL Opportunities
Remote work and remote real estate makes it easier to expand and scale the BURL investment strategy nationwide: ‘buying utility renting luxury.’
Buying utility means buying cheaper properties that quickly generate income to pay for themselves, whereas renting luxury means taking out a loan for a luxury property that will generate profit much later (but much more profit)!
In Conclusion
Remote work has been evolving well before the pandemic, COVID just accelerated its widespread acceptance. Remote work is having a massive impact on real estate trends not only in America, but worldwide, and it is almost certainly here to stay, which means that it will have a permanent affect on how people live their lives and approach real estate.