How medical doctors’ actual property traders can put together for 2021
I think it’s safe to say that most people are ready to leave 2020 behind. path Behind them. It is mind blowing to look back and see how many negative changes there have been in 2020. Now, with the New Year, the prospect of some positive change has never been more tempting.
This year has been interesting for certain real estate trends – some spawning new ones, others being quick to follow. Where will we as investors go after a whirlwind year of uncertainty as we head into 2021?
Well, I can tell you what I’m going to be researching this year, as well as some advice that I think everyone will benefit from (I know it has been great for me). Today we’re looking at what you can do to prepare for 2021 and how you can take advantage of some great trends. Let’s get started right away!
Check out Short Term Rentals (STRs)
Thanks to the pandemic, people took far fewer vacations in 2020. As a result, short-term rental locations (STR) like Airbnb saw rents drop sharply. Fortunately, with the introduction of the vaccine and cabin fever at an all-time high, this market is ready to rebound.
Even if this happens slowly (as it likely will), listing your property on a short term rental platform can be successful even without heavy use. Depending on the location of your property, you might be able to make enough profit in a week to justify a month’s expenses. The tax advantages alone make short-term rents very attractive.
Of course, many factors and a lot of care must be taken before entering the world of STRs. But by 2021 there is definitely something to consider.
Check out New Technology (for research, investing and organizing)
Obviously, technology has come a long way in the past few years. Investing in real estate has never been easier, thanks in particular to online platforms. Crowdfunding sites, for example, make investments extremely accessible to almost everyone.
If you’ve hesitated to try out some of these new platforms (or just didn’t know they existed), 2021 is the perfect time to try them out. This applies not only to researching deals, but also to finding emerging markets and organizing your communications.
Check out some of the platforms below and see if they are as useful to you as they are to me:
- DocuSign – This is a super easy way to send documents to friends and colleagues and securely sign them. No more waiting for the post to arrive.
- Evernote or Google Keep – Cloud Note apps like this let you take photos of receipts and important documents, collaborate with others, and take notes that can be browsed for easy location.
- Rentometer – This service makes it easier to compare rents for a specific area or market. This can be very helpful in determining if a particular property is worth investing in, or if you’re wondering if it’s time to raise the rent on your existing property.
- Cloud house – Although it is still in beta, this service can give you a good overview of a property’s rental potential. This is a good first step in finding good markets or weeding out certain ones.
- Personal Capital – While not specifically designed for real estate investing, this platform is great for tracking your expenses, goals, and one of my personal favorite metrics: net worth.
Don’t leave prints on the table
It is known that real estate offers some significant tax breaks. But of course they are only useful if you use them!
As I mentioned briefly, with short-term rental properties, for example, you can use the income from rent to offset the income from your day job – even without being classified as Real estate professional.
Or maybe you bought one Out-of-state ownership. In this case, all flights you take to visit the property are tax deductible.
The point is, no matter which investment path you take, don’t miss out any deductions– and leave money on the table.
Invest in Real Estate Investment Trusts (REITs)
2020 was not a great year for Real Estate Investment Trusts (REITs) due to the pandemic and economic uncertainty. For 2021, however Things are looking better. Of course, REITs tend to do reasonably well over the long term, outperforming stocks historically, and offering consistent returns.
Personally, I prefer direct ownership or investing in private real estate businesses like syndications and funds because of their more favorable tax benefits. However, if you have a significant appreciation for liquidity and still want to use some of your portfolio for real estate, REITs can be a way to get some diversification.
If you haven’t looked at REITs before, now may be the time! They are a great way to get into real estate investments with very low risk and decent returns.
Whether you’ve invested in real estate for years or are just starting out, the best thing you can do is keep learning and absorbing new information – both for yourself and your finances.
As I’m sure you know, there are a variety of ways to stay up-to-date on investment trends. Podcasts are an easy way to hear from the experts (see my favorites list) Here). Of course, books are great too, both written and in audio form (see my reading list Here) and blogs like this one are phenomenal resources too.
Even after you’ve learned enough about a particular topic to make informed decisions, studying investing and finance will keep you motivated and open up new opportunities.
With everything that happened in 2020, it was difficult to hold onto our motivations, and if you’re like me, there have been times when maintaining that forward momentum has not been easy.
Ultimately, the turn of the year is the perfect opportunity to reset and regain that motivation. Whether the New Year brings new investments, new avenues to increase efficiency, or just a more diversified portfolio, 2021 is a year to improve your life and work towards your goals.
And as always, I look forward to being a resource for you when we start this new year together. What has changed for you in 2020? What are your financial plans for 2021? Let me know in the comments below.