The Rise of Remote Work and Its Impact on the Real Estate Market

BY Luis Noronha / ON Apr 28, 2025

The rise of remote work

Introduction

The COVID-19 pandemic has markedly shifted our professional and personal lives, with one of the most significant changes being the widespread adoption of remote work. This shift has not only altered the dynamics of where and how work is conducted but has also had profound implications for the real estate market. As companies reevaluate their operational strategies and employees reconsider their living arrangements, the real estate landscape is undergoing a transformation that warrants a thorough exploration.

The Growth of Remote Work

According to a report by McKinsey & Company, nearly 20 to 25 percent of the workforce in advanced economies could continue to work remotely three to five days a week without losing productivity. This shift towards remote work has been further corroborated by a survey from Buffer, which indicated that 97% of remote workers would prefer to work remotely at least some of the time for the rest of their careers. These statistics underscore a significant behavioral change in the workforce, suggesting that remote work is not merely a temporary solution but a long-term trend.

The Impact on Urban Real Estate

As employees embrace the flexibility that remote work affords, many are reconsidering their living situations. Urban areas, once the epicenter of employment opportunities, are witnessing a decline in demand for residential properties. High-density cities, characterized by their premium housing markets and high cost of living, have experienced an exodus of residents seeking more spacious and affordable living conditions in suburban or rural areas. For instance, cities like New York and San Francisco have seen significant decreases in rental prices as vacancies rise due to this trend.

This shift has prompted real estate developers and investors to re-evaluate their strategies. Properties in suburban areas are gaining traction, with a marked increase in demand for single-family homes that offer ample space for home offices and outdoor amenities. The National Association of Realtors reported that sales of suburban homes have surged, indicating a robust market for properties that cater to the needs of remote workers.

The Suburban Surge

In response to the growing interest in suburban living, real estate developers are pivoting towards creating communities that cater to remote workers. These developments often feature home offices, high-speed internet access, and community amenities such as parks and recreational facilities. The emphasis on lifestyle has become paramount, with many buyers prioritizing quality of life over proximity to urban job centers.

The Influence on Commercial Real Estate

The repercussions of remote work extend beyond residential properties to commercial real estate as well. With companies adopting flexible work arrangements, the demand for traditional office spaces has diminished. Many organizations are rethinking their office footprint, opting for hybrid models that require less physical space. As a result, commercial landlords are faced with rising vacancy rates and the need to adapt to a changing market.

In an effort to remain competitive, commercial real estate owners are exploring innovative solutions to attract tenants. This includes redesigning office spaces to accommodate collaborative environments, incorporating health and safety features, and offering flexible leasing options. Additionally, as the demand for remote work increases, the need for coworking spaces and shared offices is also on the rise, presenting new opportunities in the commercial real estate sector.

The Role of Technology

The evolution of the real estate market in the age of remote work is also significantly influenced by technology. Virtual tours, digital transactions, and advanced data analytics are reshaping how properties are marketed and sold. The ability to conduct transactions online has made it easier for buyers to explore properties without the constraints of geography, further fueling the demand for suburban and rural homes.

Technological advancements are also enhancing the home-buying experience. Platforms such as Zillow and Redfin provide buyers with a wealth of information about listings, neighborhood statistics, and market trends. Furthermore, the integration of artificial intelligence in the real estate sector is improving property valuation, predictive analytics, and customer service, ensuring that both buyers and sellers can navigate the market effectively.

Challenges and Considerations

Despite the optimistic outlook for the real estate market driven by remote work, several challenges remain. The economic uncertainty stemming from the pandemic could impact buyer confidence and lending practices. Additionally, the long-term sustainability of remote work remains to be seen, as organizations may eventually pivot back to in-office operations.

Moreover, the rapid changes in the housing market could exacerbate issues of affordability and access. As demand for suburban homes rises, there is a risk that prices will escalate beyond the reach of many potential buyers. Policymakers and industry stakeholders must address these challenges to ensure that the benefits of this transformation are equitably distributed.

Conclusion

The rise of remote work has catalyzed a significant transformation in the real estate market, influencing both residential and commercial sectors. As individuals and organizations adapt to new ways of working and living, the demand for real estate is evolving in tandem. The shift towards suburban living, the reimagining of commercial spaces, and the integration of technology are all shaping the future of real estate in profound ways.

As we move forward, it will be crucial for industry stakeholders to remain attuned to these trends and adapt their strategies accordingly. While challenges persist, the opportunities presented by the changing landscape of work and living arrangements are substantial. Embracing these changes will be essential for success in the dynamic world of real estate.

#realestate #remotework #housingmarket #commercialrealestate #suburbanliving #homebuying #propertytrends #realestateinvesting #realestateinvestor

Sources:

How COVID-19 Changed the Workplace Forever
Post-Pandemic Trends in Real Estate
Remote Work Productivity Statistics and Insights
Future of Work: Remote, Hybrid, and In-Office Models
Urban Exodus: Why People Are Leaving Cities
Affordable Housing Trends in Suburban Areas
Top Features Buyers Look for in a Remote Work Home
Suburban Development Projects: A New Frontier for Real Estate Investors
The Decline of Traditional Office Spaces: What’s Next?
Coworking Spaces: The Future of Flexible Work Environments
The Impact of Technology on Real Estate Sales and Marketing
The Affordability Crisis in Suburban Real Estate
How Economic Uncertainty Affects the Housing Market
Emerging Real Estate Trends to Watch in 2025
Adapting Real Estate Strategies for a Remote-First World

Real Estate Tokenization

BY Luis Noronha / ON Apr 24, 2025

Real estate tokenization revolutionizes property investment by converting physical assets into digital tokens on blockchain platforms. This innovation enhances liquidity, transparency, and accessibility in the real estate market. Recent legislative developments in the United States are shaping the regulatory landscape for this emerging sector.

By Luis Noronha
Real estate tokenization

Understanding Real Estate Tokenization

Tokenization involves representing ownership of real estate assets through digital tokens on a blockchain. Each token signifies a fractional share of the property, allowing investors to buy, sell, or trade these shares with greater ease. This process democratizes real estate investment, enabling participation from individuals who might not have the capital for traditional property investments.

Recent U.S. Legislative Developments

Lummis-Gillibrand Act (July 2024)

In July 2024, the U.S. Congress passed the bipartisan Lummis-Gillibrand Act, establishing a comprehensive framework for digital assets. This legislation designates the Commodity Futures Trading Commission (CFTC) as the primary regulator for most digital assets, excluding those classified as securities, which remain under the Securities and Exchange Commission (SEC). The act clarifies token classification, facilitating compliance for real estate tokenization projects. 

Tokenization Report Act of 2024

The Tokenization Report Act of 2024 mandates a detailed study of the implications of asset tokenization across various sectors, including real estate. The findings aim to inform future regulatory approaches and ensure that the benefits of tokenization are realized while mitigating potential risks. 

Congressional Hearings on Tokenization

On June 6, 2024, the House Financial Services Committee conducted hearings to explore the tokenization of real-world assets. Discussions highlighted the potential of tokenization to enhance market efficiency and transparency. However, there are concerns regarding regulatory challenges and the need for clear guidelines to protect investors. 

Real estate tokenization

Market Growth and Future Outlook

The real estate tokenization market is experiencing significant growth. Projections indicate an increase from $3.5 billion in 2024 to $19.4 billion by 2033, reflecting a compound annual growth rate of 21%.  Deloitte anticipates that tokenized private real estate funds could reach $1 trillion by 2035, representing 8.5% of the market. 

Conclusion

Real estate tokenization is poised to transform the investment landscape by offering greater accessibility and efficiency. Recent U.S. legislation provides a foundational regulatory framework, encouraging innovation while aiming to safeguard investors. As the market evolves, stakeholders must stay informed and adapt to the changing legal and technological environment.

Sources:

A Deep Dive into US Asset Tokenization Regulations (2024 Update)

https://www.congress.gov/bill/118th-congress/house-bill/8464?utm_source=chatgpt.com

https://www.axios.com/2024/06/06/crypto-blockhain-tokens-real-estate-eggs-stocks?utm_source=chatgpt.com

https://www.appventurez.com/blog/real-estate-tokenization?utm_source=chatgpt.com

Real Estate Tokenization in 2025: What Blockchain Companies Must Know About SEC Rules

https://www2.deloitte.com/us/en/insights/industry/financial-services/financial-services-industry-predictions/2025/tokenized-real-estate.html?utm_source=chatgpt.com

Rising Construction Costs: What Investors Need to Watch

BY Luis Noronha / ON Apr 21, 2025

The latest round of U.S. tariffs is reverberating across the real estate and construction sectors—and for investors, the message is clear: rising construction costs.

Underwriting assumptions need to evolve.

Over the past few months, the relentless inflation of material costs has been chipping away at margins and disrupting timelines across almost all asset classes. Whether you’re supporting residential communities, build-to-rent portfolios, or mixed-use developments, the impact is starkly evident in the financials.

What’s Changing?

Construction inputs are rising fast, often faster than end prices can keep pace:

Construction costs Increase

Early Signs of Market Impact

• Housing starts are down 14.2% as of March—the lowest in eight months

• Consumer behavior is shifting: 30% of Americans are postponing major purchases, and 25% are canceling them entirely

• Developers are pausing deals or revising models mid-cycle

Implications for Investors

If you’re capitalizing on projects in this environment, here are the key considerations:

1. Re-underwrite Immediately

Hard costs have shifted significantly. Sponsors who haven’t updated budgets since Q4 2024 are likely underestimating exposure.

2. Focus on Developer Agility

Partners with boots-on-the-ground capabilities and control over construction (GC or affiliated build teams) are better positioned to manage volatility.

3. Mitigate Execution Risk

Ask about procurement timelines, supplier diversification, and contingency strategies. The cheapest deal may not be the most resilient.

4. Prioritize Location and Product Resilience

Markets like Florida, mainly coastal or high-demand pockets, can better absorb pricing shifts due to persistent demand. Product types with service-based revenue or long-term hold strategies may also fare better.

5. Monitor Policy Movements

Trade policy is highly political. A change in administration or global relations could reverse or deepen the current impact—stay informed.

Our View

At Lana Development, we’re adapting quickly, revisiting budgets, accelerating procurement, and doubling down on local supplier networks. Projects with the proper fundamentals and flexibility still present attractive returns. But in this environment, investor discipline is everything.

I’d be happy to connect if you’re evaluating real estate allocations or need support with stress-

testing construction-heavy investments.

Sources:

https://www.businessinsider.com/general-contractor-tariffs-have-caused-me-lose-business-2025-4?utm_source=chatgpt.com

https://www.mpamag.com/us/mortgage-industry/market-updates/trumps-tariffs-could-add-thousands-of-dollars-to-new-home-prices/524826?utm_source=chatgpt.com

https://www.bisnow.com/national/news/construction-development/cbre-tariffs-could-drive-cre-construction-costs-up-5-put-projects-on-hold-128582?utm_source=chatgpt.com

https://www.businessinsider.com/tariffs-trump-steel-aluminum-tiles-development-real-estate-construction-2025-3?utm_source=chatgpt.com

https://www.reuters.com/markets/us/us-single-family-housing-starts-tumble-an-eight-month-low-march-2025-04-17/?utm_source=chatgpt.com

#RealEstateInvesting #ConstructionCosts #Tariffs #CRE #DevelopmentStrategy #InvestorInsights #RiskManagement #newdevelopment #realestateinvestor

Mitigating Risks Amidst Fluctuating Real Estate Markets

BY Luis Noronha / ON Jul 03, 2024

Navigating the Waves of Market Volatility

By Luis Noronha 07/01/2024

Understanding and adapting to market volatility is crucial in real estate investment to maintain stability and enhance the profitability of your investment portfolio. This article delves into the strategic approaches seasoned investors employ to manage risks effectively on fluctuating markets, ensuring sustainable success through various economic climates.

How to Manage Risks effectively on Volatile Real Estate Markets

Understanding Market Cycles

A thorough comprehension of real estate market cycles forms the bedrock of successful investing. These cycles, characterized by periods of expansion, peak, contraction, and trough, mirror broader economic trends and are influenced by factors such as interest rates, employment data, and GDP growth. Each phase presents unique challenges and opportunities.

For instance, during an expansion, investors might find ample opportunities to acquire properties as prices rise, whereas, in contraction phases, the focus might shift towards maintaining occupancy and cash flow in existing investments. Recognizing which phase the market is in can significantly inform investment decisions, helping investors capitalize on opportunities and mitigate risks associated with each stage.

Diversification of Investments

Diversification is a cornerstone strategy for mitigating risk in volatile markets. It involves spreading investments across various property types, such as residential, commercial, and industrial, as well as different geographical locations. This strategy reduces the impact of a downturn in any single market or sector, ensuring more stable returns across an investment portfolio. For example, while residential properties might suffer from high vacancy rates during an economic downturn, industrial properties could remain stable or even experience growth, balancing the investment portfolio.

Financial Resilience

Building and maintaining financial resilience is essential for navigating market fluctuations. It involves strategies such as ensuring a solid cash reserve and generating positive cash flow from properties. Financial resilience enables investors to withstand unexpected downturns without liquidating assets at unfavorable times. Effective cash flow management, including meticulous budgeting and economic forecasting, ensures that funds are available to cover operating expenses and potential market downturns, thus protecting investments from possible losses.

Leveraging Technology for Market Insights

Utilizing cutting-edge technology and data analytics is increasingly important in real estate investing. Tools that offer real-time data analytics, predictive modeling, and market forecasts can give investors the insights to make informed decisions swiftly as market conditions change. For instance, platforms that analyze rental trends, property price movements, and investor sentiment can provide a crucial advantage in identifying emerging opportunities and potential risks.

Long-Term Strategic Planning

Adopting a long-term investment perspective can help investors weather short-term market volatility. Investments planned with a long-term view are typically less affected by transient market fluctuations and can yield more consistent returns. This approach involves careful property selection based on factors that will drive long-term growth, such as location desirability, future community developments, and changes in demographic trends that could influence property values and rental demand over time.

Effective Risk Management

Risk management in real estate investing involves more than just recognizing potential risks; it involves actively developing mitigation strategies. It might include diversifying property holdings, utilizing fixed-rate financing to hedge against interest rate volatility, or implementing robust property management practices to ensure high occupancy and tenant satisfaction. Regular risk assessments can help identify new risks and refine existing strategies, ensuring the investment remains secure regardless of market conditions.

Continuous Education and Adaptation

The real estate market is dynamic and influenced by myriad factors, including technological advancements, economic shifts, and regulatory changes. Successful investors continuously learn to keep abreast of new developments and strategies. This ongoing education is crucial for adapting investment strategies to current market conditions and emerging trends, maximizing returns, and minimizing risks.

Engaging with Industry Experts Collaborating with industry experts, including economists, market analysts, and seasoned real estate advisors, can offer significant benefits. These professionals provide specialized insights and recommendations for effectively navigating complex market scenarios. Their expertise can help fine-tune investment strategies, identify undervalued markets or properties, and offer guidance on regulatory compliance and market predictions.

By integrating these strategies, real estate investors can effectively mitigate the risks associated with market volatility, ensuring their investments are secure and profitable. Navigating market fluctuations successfully requires a blend of proactive strategy development, financial acumen, and a deep understanding of market dynamics, all underpinned by a commitment to ongoing education and professional development.

This structured approach not only guards against potential pitfalls but also positions investors to capitalize on opportunities in fluctuating markets, paving the way for long-term investment success.

Sources:

  1. Understanding Real Estate Market Cycles Gain insights into the four phases of the real estate cycle—recovery, expansion, hyper-supply, and recession: 🔗 Understanding the Real Estate Cycle | JPMorgan Chase
  2. Benefits of Diversification in Real Estate Investing Explore how diversifying across property types and locations can mitigate risks: 🔗 Why Diversification Is Key in Real Estate Investing | Gatsby Investment
  3. Leveraging Technology for Market Insights Understand how data analytics and technology can inform investment decisions: 🔗 Investing in Residential Real Estate Amid Market Volatility – Arrived
  4. Long-Term Investment Strategies Discover strategies for maintaining a long-term perspective in real estate investing: 🔗 Top Investment Strategies for 2024: Expert Tips for Market Volatility
  5. Effective Risk Management Practices Learn about managing risks through diversification and strategic planning: 🔗 Building a Diversified Real Estate Investment Portfolio to Minimize Risk

Strategies to Identify Profitable Investments

BY Luis Noronha / ON Jun 24, 2024

Unlocking the Potential of Profitable Real Estate Investments

by Luis Noronha /June 2024

The real estate investment landscape is rich with opportunities for substantial financial gains, provided investors can adeptly Identify High-Return Properties. Achieving success in this competitive arena requires a strategic approach, combining market insight, financial acumen, and understanding economic trends. This article explores the comprehensive strategies seasoned investors employ to identify and capitalize on high-return real estate opportunities efficiently.

Deep Market Understanding

A robust understanding of market dynamics is foundational for any successful real estate investor. It involves analyzing economic indicators that impact property values, such as employment rates, GDP growth, and consumer spending trends. These indicators can provide insights into the overall health of an economy and suggest potential hotspots for investment.
Additionally, investors must assess the local real estate market, considering property demand, supply constraints, and future development plans. By understanding these elements, investors can pinpoint areas likely to experience growth, making them prime targets for profitable investments.

Identifying High-Return Properties.

Strategic Property Analysis

Selecting the right property goes beyond simple location analysis. Investors must evaluate the property’s potential for appreciation, rental income possibilities, and intrinsic value enhancements, which includes a detailed assessment of the property’s condition, potential for
upgrades, and alignment with current market demands. For instance, properties in areas with growing employment opportunities or those near significant infrastructure projects often present lucrative investment opportunities due to their potential for rapid appreciation and strong rental demand.

Financial Metrics and Valuation Techniques

Proficiency in financial metrics is critical for identifying high-return properties. Essential calculations include the return on investment (ROI), cash flow analysis, and the capitalization rate (cap rate).
These metrics help investors assess a property’s financial performance and compare it with other potential investments. Additionally, understanding different property valuation techniques, such as comparative market analysis (CMA) and the income approach, allows investors to price accurately and value properties, ensuring sound and potentially lucrative investments.

Leveraging Technology and Data

In today’s digital age, technology is pivotal in real estate investment. Advanced data analytics, artificial intelligence, and real estate investment software can streamline the process of identifying high-return properties. These tools provide comprehensive data that can predict
market trends, analyze property prices, and suggest the best times to buy or sell. For example, platforms that offer real-time analytics on rental yields and historical price trends can help investors make informed decisions quickly and efficiently.

Building Networks and Relationships

Networking is a powerful tool in a real estate investor’s arsenal. Building relationships with real estate agents, brokers, property managers, and other investors can provide access to a wealth of knowledge and insider information. Often, the best deals are not listed on public markets; hence, a robust network can provide investors exclusive access to off-market deals and first-mover advantages in competitive areas.

Profit from Investments

Effective Negotiation Skills

Mastering the art of negotiation is essential for securing real estate investments at favorable prices. Effective negotiation involves understanding the seller’s motivations, the property’s market value, and the current market conditions. By negotiating better purchase terms,
investors can significantly enhance the potential returns from a property.

Risk Assessment and Management

Identifying high-return properties also involves managing potential risks. Investors must conduct thorough due diligence to uncover any property’s legal, financial, or structural issues. It includes reviewing zoning laws and property title details and conducting physical inspections.
Effective risk management ensures that investments are secure and potential issues are addressed before impacting profitability.

Continuous Learning and Adaptation

The real estate market is dynamic and ever-changing. Successful investors commit to continuous learning and adaptation to keep pace with new developments, regulatory changes, and technological advancements. Staying informed through real estate seminars, workshops, and industry reports is crucial for maintaining an edge in the market.
By employing these strategies, real estate investors can enhance their ability to identify high-return properties efficiently. It will maximize financial returns and minimize exposure to unnecessary risks. These practices provide a foundation for a successful and
sustainable real estate investment career, enabling investors to capitalize on opportunities and navigate challenges in the ever-evolving real estate market.

References:
The Power of Connections: Networking to Find Cash Buyers. https://housebuyerstexas.net/thepower-of-connections-networking-to-find-cash-buyers

EagleIdaho.com. https://eagleidaho.com/AgentDetails.aspx?AgentID=11

Real Estate Agent in Raleigh, NC, Shares Strategies for Navigating Market Trends and Uncertainties | ABNewswire. https://www.abnewswire.com/pressreleases/real-estate-agent-in-raleigh-nc-shares-strategies-for-navigating-market-trends-and-uncertainties_685730.html

Stock market analysis Word template for print document. https://imaginelayout.com/word-template-2847/

Don’t invest in pre-construction!

BY Luis Noronha / ON May 29, 2024

The Speculative nature of Pre-construction Real Estate Investments

Real estate has consistently been a steadfast choice in high-net-worth investments, offering a blend of stability, capital appreciation, and tangible asset value. Pre-construction properties have garnered significant attention among the myriad of real estate investment avenues. However, it is imperative to examine whether pre-construction real estate indeed constitutes an investment or if it is more accurately classified as speculation. This discourse aims to elucidate the speculative underpinnings of pre-construction real estate ventures, particularly emphasizing that the developer’s profit is inherently embedded in the pre-construction price, thus making any potential gains highly contingent on market dynamics at the time of delivery.

Understanding Pre-Construction Real Estate

Pre-construction real estate refers to properties that are sold before their completion. Investors are presented with an opportunity to purchase these properties based on architectural plans, renderings, and the developer’s track record. The allure of pre-construction investments often lies in the perceived benefits of buying at a lower price point, with the expectation that property values will be appreciated by the time of project completion. However, this expectation is precisely where the speculative nature of such investments becomes apparent.

Embedded Developer Profit: A Critical Consideration

One fundamental aspect differentiating pre-construction purchases from other forms of real estate investment is the developer’s profit in the price. Developers meticulously calculate and incorporate their profit margins, construction costs, and an array of contingencies into the pricing structure of pre-construction units. Consequently, the price at which investors buy these units already encompasses the developer’s anticipated profit.

This intrinsic inclusion of profit raises a pivotal question: if the developer’s profit is already accounted for in the pre-construction price, what margin remains for the investor? The answer hinges on market conditions at the time of completion, which are inherently unpredictable. Therefore, the investor speculates that the market will continue on an upward trajectory, allowing them to sell the property at a premium upon completion.

Speculation versus Investment: A Distinction

An investment is typically characterized by a calculated risk underpinned by thorough analysis and a reasonable expectation of generating returns based on intrinsic value and market fundamentals. Conversely, speculation involves a higher degree of risk, often reliant on market sentiment and external variables that could be more predictable and easier to quantify.

Pre-construction real estate purchases align more closely with the latter. Investors are primarily betting on future market conditions, which encompass a multitude of variables, including economic trends, interest rates, geopolitical factors, and shifts in demand and supply dynamics. Unlike traditional real estate investments, where value can be derived from existing market data, rental income, and property improvements, pre-construction investments lack these tangible metrics, amplifying the transaction’s speculative nature.

Market Volatility and Uncertainty

The real estate market is inherently cyclical, influenced by a broad spectrum of economic and societal factors. While robust growth and appreciation periods are not uncommon, downturns and market corrections are equally prevalent. The speculative nature of pre-construction investments becomes starkly evident during such downturns. Should the market experience a correction or a slowdown by the time the property is completed, investors might find themselves in a precarious position, owning a property worth less than their purchase price.

Moreover, the time horizon between purchasing a pre-construction property and its completion can span several years. Numerous unforeseen events can transpire within this timeframe, including changes in regulatory environments, shifts in consumer preferences, and macroeconomic disruptions. These factors further underscore the speculative risks inherent in pre-construction real estate investments.

Opportunity Cost and Liquidity Concerns

Investing in pre-construction properties also entails significant opportunity costs. Capital tied up in a pre-construction project cannot be allocated to other potentially lucrative investment opportunities. High-net-worth individuals often have access to diverse investment vehicles, ranging from equities and bonds to private equity and hedge funds. The illiquid nature of pre-construction investments can impede the ability to pivot and reallocate resources in response to changing market conditions.

Furthermore, should an investor wish to exit a pre-construction investment before completion, they may encounter substantial liquidity challenges. The secondary market for pre-construction contracts is typically less liquid and can be fraught with complications, including transfer fees, legal restrictions, and a limited pool of potential buyers.

Mitigating Speculative Risks

While the speculative nature of pre-construction real estate is evident, strategies exist to mitigate associated risks. Thorough due diligence is paramount. Investors should scrutinize the developer’s track record, financial health, and project location and conduct a comprehensive market analysis to gauge potential demand and supply dynamics upon completion.

A better risk-adjusted scenario is to co-invest with Developers like Lana Development (www.lanadevelopment.com) as limited partners from the initial stages. The investor will potentially run the same risks as the pre-construction buyer. However, they will invest at cost and share profits with the developer.

On another note, pre-construction purchases make sense for users who want to lock in their price for real estate they don’t plan on selling.

Margins compression on the Real Estate Market: A path to innovation for Developers

BY Luis Noronha / ON May 05, 2024

In today’s real estate market, investors and developers are confronted with the critical issue of margin compression, driven by a combination of factors such as fluctuating interest rates, rising construction material costs, increasing labor expenses, and escalating insurance premiums. This challenging landscape necessitates a fundamental reassessment of traditional practices and a proactive embrace of innovation to navigate the complexities ahead.

Photo of business partners in helmets on background of modern office building
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Understanding the implications of stubborn inflation on your real estate investments is crucial for making informed decisions

BY Luis Noronha / ON May 05, 2024

Stubborn inflation can positively and negatively affect various real estate sectors, presenting a complex picture for investors.

In the warehouse segment, rising construction costs due to inflation can amplify the expenses of developing new industrial spaces. This may lead to higher leasing rates, potentially affecting tenant demand and impacting the overall profitability of warehouse investments. However, warehouses can benefit from increased rents as businesses seek storage solutions in response to rising costs, potentially offsetting inflationary pressures.

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Demography and real estate markets shift

BY Luis Noronha / ON Mar 03, 2019

Demographic shifts change #markets. Particularly on #realestate. The new trends are in favor of #singlefamilyhome portfolios instead of #multifamilyhousing properties. The reason is the exit strategy. While you can easily dispose of a #SFH, disposing of a multifamily property on a high vacancy market in a profitable way, requires the stress of doing a #condominium conversion and selling individual units.

For more detailed info look at the entire original post at: Demographics: Renting vs. Owning by Calculate Risk.

Eleven exciting types of passive real estate investment

BY Luis Noronha / ON Feb 28, 2019

Investment for capital gain

  1. Land bank
    Investment often means getting to know a bunch of obscure phrases and having to work out what they mean. That’s not the case here! Investing in vacant land is just like putting money in the bank, except it will earn far, far more interest.
  2. Development
    If you invest your money in vacant land in the right location you can get a great return: but if you’re willing to put in a little more work and investment to get the land developed it will be worth even more. The investment cycle will be long, typically 25-35 months.
  3. Fix & Flip
    House flipping involves buying a low-priced property, then improving it to sell it at a profit. It sounds simple, but it’s not easy or quick work to find properties at the right price; find contractors who can do the requisite work quickly and well; list the property at the right price; find a buyer and negotiate an offer, and close on it. These factors make it the perfect candidate for the turn-key model of investment. This is a short cycle investment of 4-8 months.
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