BiggerPockets Daily
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BiggerPockets Daily takes the real estate investing wisdom contained in tens of thousands of BiggerPockets Blog articles and converts it into a convenient daily audio experience... because you can't have your face in a screen while you're out there living your busy life. Rental properties, house flipping, wholesaling... it's all here. And unlike other daily podcasts, the information is timeless – so you can learn on your timeline. Skip episodes, take a break, then binge and catch up. Or just make us a part of your daily routine!
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Home sales fell to one of the lowest levels on record in May as high prices, elevated mortgage rates, and a housing shortage continue to keep buyers on the sidelines.
According to data published by Redfin, there have only been two months in the past decade with fewer home sales: when mortgage rates jumped to a 23-year high in October 2023 and in May 2020, during the early days of the pandemic.
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The U.S. housing market is facing an affordability crisis. The combination of high home prices, high mortgage rates, and decreased spending power has driven housing affordability to its lowest level in decades. As such, it is difficult for investors and homebuyers alike to identify cities where they can afford to buy property.
But, there are still great opportunities to buy real estate, even on a budget. I’ve done the research and have identified the 10 most affordable markets for real estate investors. Below, I’ll explain how we arrived at the current situation, my criteria for selecting these markets, and then give you some data about the cities. Check out the list below and determine if any of these cities fit your investing goals.
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With mortgage rates and home prices high, more homeowners are staying put, according to a report by Redfin.
The number of homeowners looking to move to a different metro area started to decline in the fall of 2023, dropping to 23.9% in November 2023. That marked the lowest share in a year and a half and below the 26% seen last summer.
While some of it also has to do with remote work becoming less popular with employers, the rate of mobility among homeowners has steadily been decreasing since the 1980s as older Americans have decided to age in their current homes.
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Real estate investing can be a one-and-done deal or a strategy with more work but potentially higher profits. If you’re an investor looking for ongoing passive income, the BRRRR method may be a good option.
The BRRRR method means you buy, rehab, rent, refinance, and repeat. It’s a cycle to build a robust real estate portfolio by purchasing undervalued properties using the equity of an existing investment property, renovating the new property, renting it out, and repeating the process.
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When my husband and I got married, we bought our first place—a brand-new, 1.5-bedroom condo—in Bedford–Stuyvesant, Brooklyn. At the time, the Bed–Stuy neighborhood was rough—for example, a biker gang that loved to throw huge all-night parties was headquartered at the end of our block, and there were abandoned buildings every few feet, often rustling with the sound of homeless inhabitants. Back in the early aughts, this ZIP code was not for the faint of heart.
But at $375,000, a solid C-/D neighborhood was what we could afford in NYC, and our place was new and huge (for Brooklyn) at 1,200 square feet. Plus, I had a hunch. When we first toured the apartment, I went up on the roof and looked out over the neighborhood. From that vantage point, I could see three luxury buildings going up within a few blocks of us. I knew this neighborhood was about to change.
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Remember the container ship that got wedged in the Suez Canal in March 2021? Within days, hundreds of ships halted. In less than a week, 12% of global trade halted.
This is merely one simple example of volatility. A tiny event in some remote corner of the world made life perilous and unpredictable for a billion people. The shockwave reverberated across the Earth.
There are many more examples like this. COVID-19 spawns in Wuhan, China, and creates a once-in-a-100-year worldwide pandemic. Or more theoretically, one butterfly flapping its wings spawns a hurricane on the opposite side of the globe.
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Since 2006, my team and I have delivered almost 500 Las Vegas investment properties (> $130 million). The properties had an annual appreciation of 15% and annual rent growth of 7% (2013 through December 2023), and our average vacancy rate stayed below 2%, including during two major economic turmoils:
2008 housing crash: Zero decline in rent and zero vacancies.
COVID pandemic eviction moratorium: No impact.
So why did our clients’ properties perform when most others did not?
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Do you want to get started in real estate investing but don’t have the funds to purchase an entire property? Fractional real estate investing may be the answer you’re looking for. Fractional investing offers lucrative opportunities to own part of a property rather than an entire one.
Fractional real estate ownership can be affordable for startup investors who want to enter the real estate market. But what is fractional investing? And is this the right investing model for you?
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A December report issued by staff of the U.S. Securities and Exchange Commission (SEC) discusses several potential modifications to the accredited investor definition, as suggested by sources like the Investor Advisory Committee and the Small Business Capital Formation Advisory Committee.
The Dodd-Frank Act of 2010 requires the SEC to review the definition every four years in light of changes in the economy. The goal is to maintain sufficient protection for unsophisticated investors while providing for investor participation in exempt offerings that play an important role in innovation and economic growth.
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There may be a real estate underinvestment crisis looming in the coming decades, thanks to baby boomers.
According to a joint study from Morning Consult and home improvement company Leaf Home, 55% of baby boomers plan to age in their 40-year-old-plus homes and have no intention of selling or renovating.
That means when millennials inherit homes, they may be faced with a mountain of deferred maintenance that may prove costly and lead to a potential construction and supply crunch. Meanwhile, empty nesters own twice as many large homes as millennials with kids, contributing to the housing supply crunch across the U.S.
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At the end of January, the House passed legislation that would extend some of the provisions of Trump’s 2017 tax bill and expand the Child Tax Credit (CTC), along with other tax reform measures.
If passed by the Senate and signed into law by President Biden, the Tax Relief for American Families and Workers Act of 2024 would allow real estate investors to continue to claim 100% bonus depreciation, elect to expense depreciable business assets up to an increased limit, and potentially deduct business interest up to a higher limit. The Act would also restore domestic research or experimental costs expensing.
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One of the questions we see on the BiggerPockets forums over and over again is, “Where do I find a good lease document?”
When people ask that question, they really don’t mean that they want a good lease document. What they mean is they want a free lease document.
The truth is that leases are really the most important investment you’ll make when starting your career as a self-managing real estate investor. The free leases that self-managers share are likely to be the most expensive option you’ll find in the long run.
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In the ongoing quest for happiness, a recent Empower poll disclosed that around 60% of Americans believe money can indeed buy happiness.
However, the dynamics of money’s role vary from person to person. For 67% of respondents, happiness hinges on the ability to pay bills on time, while more than half prioritize living debt-free and enjoying luxury without financial worry. Another 45% see homeownership as integral to their path to happiness.
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You can’t scroll through your daily news feed these days without seeing story after story about the impact of generative AI on virtually any and all industries. It’s here, and the good news is it can be an incredibly useful tool in real estate.
According to a recent analysis by McKinsey Global Institute, “In our own work with AI, we have seen real estate companies gain over 10% or more in net operating income through more efficient operating models, stronger customer experience, tenant retention, new revenue streams, and smarter asset selection.”
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In 2005, I decided to start an investor services business. I reviewed all the popular investing literature. What I found were self-professed experts offering opinions and no processes. As an engineer, opinions hold little value.
I shifted my research focus to the commercial sector, where I found rigorous processes that resonated with me. I discovered that retail store location selection and stocking methodologies are excellent guides to systematic residential investing.
Here, I will explain how I use methodologies from national retailers to select properties that generate reliable income.
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In case you missed it, Scott Trench, CEO of BiggerPockets, wrote this thoughtful article: Multifamily Is at High Risk of Continuing Its Historic Crash in 2024—Here’s Why. Scott and I have been discussing this topic offline anyway, so I thought I would take him up on his invitation to debate the subject online. Healthy debate is what BiggerPockets is all about, right?
I will start by saying I agree with most of what Scott wrote. I agree with most of his facts, the challenges facing the multifamily space, and especially the problems with many operators who have run into problems of late.
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Virtual house flipping can be an exciting, lucrative way to get involved in real estate investing. But as with as any type of investment, it’s important to understand the finer details to determine where you fit in.
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Three years ago, I opened the doors of my guest room to travelers on Airbnb to offset my mortgage. What started as a way to supplement my living expenses evolved into a passion for creating 5-star guest experiences and led me to start Stay Peachy Homes, a short-term rental (STR) property management company that helps homeowners and investors maximize their property’s performance and remove the management hassle.
However, like many first-time hosts, I made my fair share of mistakes in that first year. These errors not only taught me valuable lessons but also helped me fine-tune my approach to managing short-term rentals.
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Do you enjoy filing your taxes? Of course you don’t. But there’s a silver lining.
Doing your taxes can be fun (or at least tolerable) when you understand how to make the best of your circumstances. Savvy investors know the power of taking advantage of every last deduction—within the limits of the law.
This leads to an important question: How much mortgage interest can I deduct on my taxes?
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As most house flippers or BRRRR landlords will tell you, paying for hard money—with high interest rates and points tacked on top—can take huge chunks of profit out of a project. For landlords, extra expenses are involved in making monthly payments and paying to refinance into a regular mortgage, further eroding the bottom line.
It’s generally a big pain and a reason many would-be-flippers and landlords stay on the sidelines or prefer to find private lenders, content to get paid once a deal sells or secures long-term financing post-rehab.
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