For many small businesses, growth is a tricky thing. You obviously want it to happen, but if you don’t plan for it and manage it well, it can get out of hand. On the flip side, there are times when your growth plans could definitely use a boost.

You didn’t start your company so it could flounder. You want your team to go places, gain recognition and serve markets in innovative ways. While you can see these visions play out in your head, knowing how to carry them out isn’t as clear-cut. To ready your organization for growth, here are three methods to try.

1. Delegate Like a Boss

You founded your company on your ideas. So it’s not unusual to feel the urge to oversee every detail. And in the early stages of a small business, everyone’s roles can be less structured. There’s a need for a single decisive voice to lead the way.

But this chain of command can stunt your company’s growth as operations get off the ground. If employees are afraid to act without your stamp of approval, initiatives will fall by the wayside. Team members won’t feel empowered or trusted, to the point where they withhold their skills and expertise.

A lack of role clarity can also hold your team back. Employees won’t know what falls within their range of authority and responsibility. Staff members will feel uneasy about stepping on someone else’s toes, so they won’t take any steps at all. Role ambiguity can confuse, frustrate and demotivate.

That’s why Thryv, a provider of all-in-one small business management software, recommends a matrix structure. Under a matrix structure, the business owner is like the head coach of a football team. You’re in charge of the game plan but delegate to and empower those who assist you. Each project has a lead who manages the initiative with the help of other employees’ contributions. Every team member knows what to accomplish and how it relates to the company’s strategy.

2. Do a Process Audit

It’s often not the people who fail but the processes they’re expected to follow. Business growth can stagnate when there are procedural and resource inefficiencies. These inefficiencies can stem from overly complicated procedures or not having any processes at all.

To find what’s not working well, you need to play detective. Investigate what resources and courses of action your team’s relying on in different situations. Say your marketing team is responsible for supporting your retail sales team. Marketing creates in-store brochures and other materials for the sales staff to use.

However, the stores consistently report problems with not receiving promo materials on time. In addition, there are frequent errors in what the brochures and flyers say. Further investigation shows there are too many people involved in the approval process. Marketing scrambles to make last-minute changes, and overall direction is inconsistent. Employees are also shipping materials they could digitally distribute with technology.

Revising these processes will speed things up and improve accuracy. You could start by removing unnecessary people from the approval chain. Better tech resources at the store level will allow sales staff to print the basics on demand. And tighter planning and cutoff dates could let marketing complete their creative tasks without the pressure that leads to mistakes.

3. Optimize Internal Communication

Poor communication within a company does more than create chaos. It erodes trust in the team and leadership for more than 40% of employees. And internal communication troubles impact a larger proportion of remote workers. About 54% of offsite staff say it negatively influences trust in leaders, while 52% say it lowers conviction in the team.

Whether your small business operates remotely or in person isn’t the issue. It’s how, when and what you communicate. Effective communication requires avoiding mixed messages and choosing the right channels for different kinds of information sharing. You wouldn’t explain a major change in company direction via Google Chat any more than you’d hold an all-hands meeting to ask a question about an invoice. Choosing the channel according to context, your audience, and the nature of the information will enable you to get your message across in the right way at the right time.

Not surprisingly, Slack is one company that has internal communication figured out. Its real-time messaging platform allows team members to communicate instantly, eliminating lengthy email chains and enabling quick decision-making. Designated channels keep conversations organized and relevant team members engaged. And because conversations are searchable, all employees can call up needed info on demand.

Growing Your Small Business

Every owner among the 33.2 million small businesses in the U.S. wants their company to thrive. Firing up your growth plans can help you gain the steady market traction you need to stick around. While external factors influence your goals, what’s happening on the inside is usually the thing that stops you from achieving them. Optimizing delegation practices, processes, and internal communication will remove common barriers to small business growth.

Knowing how to find investment properties for sale in the real estate market is the key to earning anticipated rental income and profits. 

Finding investment property for sale isn’t a one-size-fits-all approach, since there are many ways to invest in real estate.

Check out our guide on finding good investment properties for sale to make the most of your goals as a real estate investor.

Determine Your Investment Strategy

Before buying investment properties, you should determine your investment strategy. 

This will help you determine which investment properties will help you reach your goals. For example, there’s a significant difference between flipping houses and holding on to rental property.

Every real estate investor has different ideas and strategies, which are essential when finding investment properties.

BRRRR

The BRRRR method, or “’buy, rehab, rent, refinance, repeat,” is for investors who can find undervalued distressed properties, fix them up, find qualified tenants, refinance the property, and repeat.

The “refinance” part of the BRRRR method is a cash-out refinance. The point is to build equity in the home by improving the property’s value by rehabbing it. The higher after-repair value provides more home equity. 

You can use the home equity on a conventional mortgage cash-out refinance. Use the excess cash to buy an investment property to increase your real estate portfolio.

This investment strategy works best for investors who want to build a more extensive portfolio. The cash-out refinance provides the down payment to purchase another undervalued, distressed property.

Ideally, you shouldn’t invest more than 70% to 75% of the property’s after-repair value (ARV), or the anticipated property value after renovations, to make the BRRRR strategy work.

This method allows for greater cash flow, allowing investors to take advantage of hot deals when they hit the market. 

If you can’t move fast, someone else will. So the BRRRR method provides the best of both worlds: You own an investment property but also have capital available to purchase more. 

To make this method work, you must be willing to find investment properties for sale often to take advantage of the best deals. 

House hacking

House hacking is a strategy for real estate investors who can rent part of their primary residence. This is often a good method for a first rental property, as it allows for more cash flow. 

You can house hack by purchasing multifamily properties, such as a two- or three-unit building. The key is living in one unit and renting out the remaining units.

However, if you don’t have the capital to afford the purchase price of a multiunit property, you can use the method on condos, townhomes, or even single-family homes. 

As long as you live in the house, you can rent out other bedrooms and use the money to cover your housing costs. This includes property taxes and homeowners insurance.

Even if you don’t profit from the rent charged, you’ll save money on housing expenses and potentially benefit from your taxes by deducting depreciation and other housing expenses—all while earning equity in the home.

House flipping

House flippers are real estate investors who enjoy finding undervalued investment properties, rehabbing them, and selling them for a profit. 

Unlike the BRRRR method, you don’t hold property when flipping houses. Instead, you buy an investment property, rehab it, and sell it as quickly as possible to minimize the holding costs, as they decrease your profits.

You don’t need special skills or even a license to find an investment property to flip. The key is to have a network of real estate professionals working with you, including a real estate agent, mortgage professional, real estate attorney, and contractors. 

With a circle of reputable real estate professionals, you can quickly jump on investor-friendly properties for sale, taking advantage of the opportunity to flip houses.

Buy and hold

Buy-and-hold investors purchase investment properties for sale to hold on to and use as rentals. 

When done properly, it’s a long-term investment strategy that provides passive income through monthly rent. Proper research is the key to investing in real estate.

You should know more than the property’s market value when you buy an investment property. Holding on to a property to earn rental income requires extensive research into the area’s rental market, including the area’s safety and school ratings. 

Don’t assume any real estate investment will turn a profit; instead, do your due diligence to ensure you’ll see the desired returns.

Short-term or vacation rentals

You can also consider investing in short-term or vacation rental property. Unlike buy-and-hold properties, you rent for a few days, with a maximum of 30 days in most states. 

The popularity of sites like Airbnb and Vrbo has increased the number of rental properties investors purchase for short-term rentals.

Like any real estate property, you must know the area to ensure it’s lucrative for short-term rental properties. 

If you find the right area, you may make much more than what you’d earn from traditional rental properties, since the rent charged per night far exceeds the per-day rent charged to long-term tenants.

Some real estate investors prefer short-term rentals because they can control the schedule. You can optimize pricing for busy seasons and offer many opportunities for tax deductions.

How to Find Investment Properties

After choosing your investment strategy, it’s time to learn how to find investment properties. 

The best strategy includes the right real estate professionals and plenty of legwork. Here are the tips and tricks to start your real estate investment strategy.

With an investor-friendly real estate agent

Real estate agents specialize in different properties and types of real estate transactions.

If you partner with a real estate agent to find investment properties, ensure it’s someone with extensive experience in the real estate investment industry, specifically in the property type you want to purchase.

There’s a significant difference between a real estate agent who helps first-time homebuyers and one who helps real estate investors find the perfect property to buy and hold or fix and flip.

Finding the best real estate agent for the job can mean the difference between a profitable investment and one that causes more headaches and financial stress than you anticipated.

Real estate listings

Accessing real estate listings from as many sources beyond the multiple listing service (MLS) provides more potential. Some properties sell quickly before real estate investors can see them. 

Perusing multiple real estate websites to see as many opportunities as possible is essential.

Even if you work with a real estate agent, you can do some legwork yourself. 

For example, you can show interest in properties on sites like the BiggerPockets real estate listing site to gain early access to the property and be one of the first bidders if it’s a good fit.

Real estate investing groups

Surrounding yourself with like-minded people may be one of the best tactics to find investment properties for sale. 

You may think other real estate investors are competition. Instead, they can be a source of referrals and helpful information.

You may receive referrals for wholesalers, contractors, and even properties for sale that meet your needs, but not the person referring them to you. 

Look for local real estate investing groups, or use online forums like the BiggerPockets forums to connect with real estate investors nationwide.

Auctions

If you’re in the market for a fix-and-flip property or want to start the BRRRR process, attending local housing auctions may help you find off-market properties for sale at prices much lower than their value.

Lenders sometimes auction foreclosed or bank-owned properties that are run-down and need a lot of work. This method requires extensive networking to find auctions to discover hidden gems. 

However, beware that most properties at an auction are sold as-is, and you may not have the opportunity to inspect them first. This method may not be best for your first rental property, but it can be a good way to increase your portfolio.

Real estate wholesalers

Real estate wholesalers do all the legwork that some real estate investors don’t have time to handle. 

Wholesalers are experts at finding undervalued properties in the local real estate market, putting them under contract, estimating the necessary work and ARV, and assigning the contract to real estate investors like yourself.

Real estate wholesalers target motivated sellers on the verge of losing their homes to foreclosure, allowing investors to purchase undervalued properties before they hit the housing market.

Property management companies

Property management companies work directly with property owners, managing their properties. 

They are usually the first to know when owners want to sell their residential properties, providing you with inside information to act quickly before the property hits the market. 

Many properties for sale that property managers share are move-in ready and require little to no work before renting them to tenants.

Drive around the area

If you don’t mind doing a little legwork yourself, drive around areas where you’re interested in purchasing the right investment property and look for potential properties. 

You may find homes hitting the market, homeowners considering selling, or run-down/abandoned homes that you can purchase for a low price, fix up, and sell for a profit.

Word of mouth

Let everyone know that you’re a real estate investor always looking for investment properties. 

Talk to friends, family, real estate professionals, contractors, insurance companies, mortgage lenders, hairdressers, and even your favorite barista.

You never know who might know someone who is selling the perfect property, leading you to investment properties that check all your boxes.

Look for short sales

If you hear of a distressed homeowner who cannot make his mortgage payments, consider contacting them to discuss a short sale. 

Like foreclosures, short sales are usually sold as-is, so it may be a fixer-upper situation, but it could allow you to purchase profitable investment properties.

How Do You Determine a Good Investment Property?

No two real estate investors have the same idea of good investment properties. What is profitable for one investor may not be ideal for another.

The key is understanding your real estate investing strategy to find investment properties that meet your needs and allow you to reach your financial goals.

Here are three common areas to focus on.

1. Location and market analysis

Location is everything in real estate investing, but market analysis holds just as much weight. 

You can find an investment property that seems perfect on paper. Still, if it’s not in a busy rental market or the property values don’t regularly appreciate, you may not realize the anticipated rental income or profits.

2. Repairs and maintenance

Carefully consider the property’s necessary repairs and maintenance. If it’s a fix-and-flip, this plays a vital role in your profits, but considering this factor can be important in any real estate investment transaction. 

Take into account how well the property was maintained and how you’ll handle maintenance moving forward. Factor in whether you’ll pay a property manager to handle it, as this will increase your overall costs.

3. Cash flow

Your real estate investment strategy will also determine what you should look for in cash flow. If you’re investing for rental income, you should carefully evaluate the property’s costs and potential to ensure you’ll have the desired cash flow.

If you’re purchasing an investment property as a fix-and-flip or BRRRR, you’ll have different cash flow thresholds, which will play a role in how to find investment properties.

The Bottom Line

Knowing how to find investment properties is crucial in your real estate investment strategy. 

Before looking for the perfect investment property, determine your strategy, long-term plans, and risks you’re willing to take, and then take steps to find properties that meet your needs.

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Effective marketing is essential for success in today’s fast-paced and always-changing corporate environment. Even though many businesses spend a lot of money on marketing, some important components frequently go undetected or underused.

This article reveals four frequently disregarded marketing strategies that could completely revamp your company. You may obtain a competitive advantage and optimize the growth potential of your business by combining these methods into your marketing campaigns.

1. Make Good Use of Customer Reviews

Customer reviews may make or ruin a company in the digital era. However, a lot of businesses don’t make the most of this important marketing resource. Positive customer reviews not only boost credibility but also drive new customers to your doorstep.

Encourage satisfied customers to share their experiences through online platforms like Google Reviews, Yelp, or industry-specific forums. Additionally, actively engage with customer feedback by responding promptly and professionally, showcasing your commitment to customer satisfaction. By leveraging the power of customer reviews, you can build trust, enhance your online reputation, and attract a steady stream of new customers.

In a recent conversation with Matt Peters, CEO of Search Manipulator, he provided some insight: “Online reviews are an important resource for consumers in the current digital era as they try to make educated selections regarding goods and services. However, it’s not enough for companies to passively collect reviews; they must proactively leverage this valuable resource. By accepting honest feedback, businesses can improve their products, services, and customer experiences.”

2. Prioritize Personalization

Customers want a personalized touch. While targeting broad customer segments is essential, personalization can take your marketing efforts to the next level. A tailored approach in digital marketing gives a company an edge over its competition, much like a personal stylist has a professional edge over a retail salesperson.

You enhance your customers’ experience by tailoring offers and recommendations based on individual preferences. How can you achieve this effect? Use purchase history, browsing behavior, and demographics to fine-tune marketing campaigns. You can also use algorithms and automation tools to deliver content across various platforms like email, social media, and websites. Interact with your audience wherever they are.

But marketers beware: as AI-driven tools and automation are being increasingly utilized, customers will become more attuned to what is meant to sound “like a human.” Creating an authentic, personalized experience will strengthen brand loyalty and improve conversion rates.

3. Choose Quality and Focus on ROI

There is an enormous variety of companies specializing in digital marketing, but the quality of these companies and their tools are just as varied. Be certain to gauge the quality of your marketing company’s advertising platforms and websites. Some companies will create a long list of URLs by publishing your business to lots of free websites, but this does not provide your business with a meaningful ROI.

A better choice in a marketing agency is one that focuses on securing placements on higher ranking sites and will utilize a wide variety of advertising options, including Facebook, Google Ads, LinkedIn, Yelp, etc. A higher quality marketing company will also conduct A/B tests with their ads and demonstrate to your business that they are generating a significant ROI.

4. Incorporate Video Content

Video content has exploded in popularity in recent years. It is a dynamic medium that grabs a potential customer’s attention like no other channel. For some odd reason, many businesses do not take full advantage of this powerful marketing tool.

When built into a well-rounded marketing strategy, video content can offer many benefits. You can create compelling videos that showcase your products, provide tutorials, share customer success stories, or give behind-the-scenes glimpses of your company.

Leverage platforms like YouTube, Instagram, and TikTok to share your videos and engage with your target audience. Video content captures attention and enhances brand storytelling, improves website SEO, and increases social media shares. Through the intentional use of video content, you boost your marketing campaigns and engage with your audience more meaningfully.

Being Innovative Pays Dividends in Digital Marketing

To gain an edge on your competition when it comes to digital marketing, you have to be willing to adopt strategies beyond the “tried and true.” By making good use of customer reviews, prioritizing personalization, focusing on quality and ROI, and incorporating video content—you can differentiate your business from the competition and achieve remarkable results. Remember, success lies in continuously adapting and refining your marketing strategies to meet your target audience’s evolving needs and preferences.

The Federal Reserve has been actively trying to tame inflation for over a year now. Since March 2022, the central bank has hiked its benchmark interest rate 11 times—all in hopes of getting inflation down below 2%.

While the efforts have so far proven unsuccessful (the nation’s inflation rate is 3.2%, as of last week’s numbers), one city has bucked the trend: Minneapolis. 

The Minneapolis-St. Paul metro area’s inflation rate slipped below 2% back in May. By July, it had dipped to just 1%— the lowest of all major metros in the U.S. 

How did the Twin Cities do it? It all comes down to housing.

Bucking the NIMBY Trend 

Shelter accounts for a third of the overall consumer price index, so with ever-rising home prices—not to mention higher mortgage rates—housing has played a big role in the run-up of inflation in recent months. 

So that’s where Minneapolis started. Back in 2018, the city stuck it to the Not in My Backyard (NIMBY) crowd, passing the Minneapolis 2040 plan, which eliminated single-family zoning in 70% of the city’s residential land. 

And the move was an unleashing. “The most wonderful plan of the year,” as the Brookings Institution dubbed it, led to an explosion of new development—and most importantly, more dense housing. 

Duplexes, triplexes, and apartment buildings popped up left and right, and developers no longer had to jump through hoops for zoning changes or face hard-nosed neighborhood opposition. At one point last year, a whopping 1,500 multifamily permits were approved in just one month. Across all of 2022? The city saw about 16,000 new multifamily permits approved—up by about 3,000 from 2021 and even more from years prior.

The extra supply helped tamp down housing cost growth—both for buyers and renters. The median home price in the city currently sits at $382,000, according to Redfin, significantly lower than the national average of $426,000. 

The city has also invested more than $320 million in rental assistance and subsidies over the last few years, tempering local housing costs even further. In fact, according to the Pew Charitable Trusts, Minneapolis rent growth since 2017 is just 1%. Nationwide, it was 31%. 

As Minneapolis Mayor Jacob Frey recently told Bloomberg: “I can’t tell you how many people were like, ‘Oh, look at all this supply, look at all these just brand-new buildings,’ and kind of scoffing at it like this was going to lead to gentrification or rents skyrocketing. The exact opposite has happened.”

Can Other Cities Replicate Minneapolis’ Strategy?

Judging by the latest inflation numbers, Minneapolis clearly did something right. But is it a strategy other cities can replicate? That remains to be seen.

The NIMBY movement has been vocal in recent years. It effectively killed New York Gov. Kathy Hochul’s housing plan earlier this year, which aimed to add 800,000 new housing units to the state over the next decade. It’s also posing challenges in California, Georgia, North Carolina, Texas, and other states across the country. 

Those in this movement come armed with plenty of talking points, such as: Adding more dense housing to suburban areas will cause crime to spike. Property values will drop. Traffic will worsen. It will stretch local services thin or change the character of the neighborhood.

Whether those arguments are true is debatable, but they’re arguments nonetheless. And until cities are willing to take on these movements, mimicking Minneapolis’ approach will be all but impossible.

That said, California, which undoubtedly has one of the biggest affordable housing shortages in the nation, has tried to make inroads. The state is actually suing the city of Huntington Beach for restricting certain development applications. Gov. Gavin Newsom even called the city’s elected officials “the poster child for NIMBY-ism.”  

Considering Huntington Beach filed its own lawsuit against the state, it’s likely to be a protracted battle (and probably not the easiest path for other locales to follow). 

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Logan Mohtashami, HousingWire lead analyst, joins ‘Squawk Box’ to discuss skyrocketing mortgage rates, after the National Association of Realtors warned rates could hit 8% if the economy continues to show strength and the Fed hikes rates again, the impact on the housing industry, and more.

Some business owners just get it. Starting, running and growing a company is their jam. They seem to flow through their day making good decisions, securing deals, and spotting opportunities for growth. They view business problems as fun codes to crack and they enjoy puzzling over details. These people have high business IQ. More than common sense, this is commercial awareness meets pluck. This is an inner knowing of what’s going on and what’s going to take off.

Your business IQ develops with experience, but just because you’ve been in business a long time, doesn’t mean yours is high. Here’s how to use ChatGPT to increase your business IQ.

How to improve your business IQ with ChatGPT

Understand your why

Entrepreneurs with a high business IQ know why they do what they do. This knowledge forms a solid foundation from which they build. Without a strong sense of why, everything you create will feel unstable. Everything that crosses your path takes longer to process because you’re dealing with multiple scenarios case-by-case. Understand what gets you out of bed and keeps you going to never question a move again. Here’s the prompt for ChatGPT.

“I want to understand what motivates and drives me so I can apply the insights to my business. Imagine you are a high-level entrepreneur psychologist tasked with figuring this out. For context, the three things I would say are my biggest work achievements are: [describe your three biggest achievements]. They meant so much to me because [describe why they meant a lot]. I enjoy tackling a challenge when it has these components: [describe the components] and I become demotivated when [explain when you become demotivated]. Based on this information, can you summarize my ‘why’ in a single sentence? Please provide options for what this might be.”

Identify your traction metrics

Do you know what’s working? Can you safely say where your best customers come from, how long you spend on every marketing channel within your company, and how much each one costs per new customer? More than this, do you know how long a customer stays with you, and how this changes based on how they found you? Traction metrics hold secrets and shouldn’t be ignored. Data is a huge component of business IQ. Understand yours more using this prompt.

“My business aims to [describe your short term business goals]. The main drivers towards these goals are [explain the inputs that contribute towards hitting your goals]. Imagine you are a business analyst. Can you outline the main traction metrics applicable to my business? Include both inputs and outputs and when I should track them to check I am on target for achieving the goals.”

Identify black swans

“Everyone has a plan until they get punched in the mouth,” Mike Tyson once said. It’s easy to run a business when things are going well, it’s less easy when unprecedented events, known as black swans, hit and there’s no blueprint for how to move forward. Business IQ means knowing what to do in any situation, but you can get a head start by asking ChatGPT what those situations might be. Ask for ChatGPT’s wildest dreams of what could go wrong and think about what you’d do should they come to pass.

“My business operates within the field of [explain your field or industry]. A black swan event is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Can you preempt some potential black swan events in my industry or in business in general, that could happen within the next decade? For each, suggest what I would do to mitigate the risk of it being detrimental.”

Find hidden performance indicators

To break records, you have to make records. Hone your business IQ by knowing the lay of the land before you take any more action. With this prompt, ChatGPT will suggest a long list of what you should track in your business. Discard any you already track and pay attention to those you don’t. Could there be something in there that would uncover opportunities for growth? Low business IQ means burying your head in the sand. High business IQ means being intentional about what you pay attention to.

“Within my business we track [outline the metrics you regularly track in your business] towards our goals of [describe your business goals]. Play the role of a business analyst tasked with digging into the data. Can you suggest any metrics that we don’t currently track that could be useful indicators of performance? For each one, explain why it could be relevant.” Follow up with “which of those do you think is the most important for us to track?” for further detail.

Create a growth strategy

How intelligent you are within the world of business doesn’t hinge on what you do now, it hinges on what you do in the future. Your success is dependent on your next few moves, but do you know what they are? By now, ChatGPT understands you and your business and is ready to help you plan the way ahead. Grow your business IQ by collecting all the options before you whittle them down to just a few. Use this prompt to find ideas you may not have thought of yourself.

“Given what you know about my business, my ‘why’, our traction metrics and hidden performance indicators, can you suggest a strategy for growth? Include potentially far-fetched ideas that we likely haven’t thought of before. Incorporate a period of testing for each idea and explain how I could test its effectiveness before continuing or moving to something else. Put the ideas in order of quickest win to most effort.”

How to become a smarter entrepreneur with ChatGPT

Develop your business IQ with these five simple prompts for ChatGPT, to set yourself up for continued success in your entrepreneurial ventures. Define your why in a single sentence, identify the metrics that make the difference, pre-empt black swans, find the hidden KPIs, and make a growth strategy for the future. You’re already smart, but you can get smarter, and this is how to make that happen.

This article is presented by PropStream. Read our editorial guidelines for more information.

In the first half of 2023, only 14 of every 1,000 U.S. homes changed hands. That’s down from 19 out of every 1,000 during the same period in 2019 and represents the lowest share in at least a decade.

Needless to say, the housing market is experiencing a slowdown, leaving some prospective investors uncertain whether now is a good time to get into real estate. However, with the right strategy, you can make money in any market.

In this article, we’ll explore factors to consider before investing in real estate, market trends to watch, and which investment strategies these call for.

Factors to Consider Before Investing in Real Estate

Before investing in real estate, get your financial house in order. That means maintaining a steady income, building an emergency fund, reducing debt, and keeping a high credit score. The more financially secure you are, the better positioned you will be to buy (and secure financing for) an investment property.

Also, determine how much risk you’re willing to take on (i.e., your risk tolerance). Though real estate tends to be more stable than other investments, such as stocks, it still comes with risks. Being aware of these is crucial to making informed investment decisions. 

Lastly, consider your investment goals: Are you looking for long-term appreciation, regular rental income, a quick profit, or some mix of the above? Your objectives will have a major impact on when and how you should invest.

The best time to get into real estate is when the right deal presents itself, and you’re in the financial position to take it. But the right deal will look different based on market conditions and trends. 

Here are five factors to watch right now and how they might impact your investment strategy.

Market cycles

Real estate follows market cycles. On a macro level, these can be broken down into four phases: 

• Recovery: This is a period of expansion that follows a market downturn. Consumer confidence and demand increase, and property values go up.
• Peak: This is the height of the real estate market cycle. Housing demand and activity are at their strongest, leading to high property values. 
• Contraction: This is when the market starts to cool down. Housing demand and property prices begin to fall, and sellers may struggle to sell their properties.
• Trough: This is the bottom of the real estate market cycle. Buyer demand and housing activity hit a low before the market starts to recover, and the cycle repeats.

As an investor, it’s important to understand the current phase of the market cycle. Right now, we are arguably in a period of contraction, which means purchasing a property may be less attractive due to potential short-term depreciation or high financing costs. Consequently, taking a long-term buy-and-hold strategy, finding rental properties that cash flow now, and exploring creative financing options may be worthwhile.

If you’re worried about a major housing crash (the trough phase) in the near future, know that these are hard to predict and only occur about every 18 years. 

In addition, the housing market also undergoes seasonal cycles. In the winter, housing activity slows down because few want to move when it’s cold. Then, in the spring, it starts picking up again. By summer, home sales usually reach their peak. 

For investors, this means you may have more property selection in the spring and summer but more bargaining power in the winter (when buyer competition is lower).

Ultimately, savvy investors can make money in any market. The key is to have a broad range of investing strategies at your disposal.

Mortgage rates

Mortgage rates can directly impact your real estate investing strategy. The higher they are, the higher the cost of financing an investment property. Consequently, the potential return must be that much higher to make the investment worth it.

Since last November, mortgage rates have been hovering around 6% to 7%. This has kept many homeowners with mortgages locked in at or below 4% from selling. It’s also dampened buyer demand. 

However, the current rates appear to be the new normal and may even go higher. (Keep in mind that 7% is still relatively low by historical standards.)

As a real estate investor, this means you shouldn’t count on lower mortgage rates anytime soon. So, if a property deal looks good on paper now, potentially getting a lower mortgage rate in the future shouldn’t hold you back. Plus, even if mortgage rates drop, you can always refinance your mortgage later.

Rent growth 

Rent growth refers to the overall increase in rental prices over time. It’s an important metric for landlords, who depend on it to cover their rising property expenses (e.g., from property taxes and home insurance) and to make a profit from their investment. 

While rent growth generally keeps pace with inflation, it went negative for the first time since 2020 in May, when asking rents dipped by 0.6% year over year. In other words, new rentals are commanding less in rent than they were a year ago.

For investors, this trend may be concerning. After all, you want to be able to rent your properties for more in the future, not less. 

However, keep in mind that negative rent growth doesn’t apply to existing rentals, which tend to be sticky (i.e., more resilient to market changes). So, as long as a rental property deal doesn’t depend on raising rents in the foreseeable future, it may still be a worthwhile investment. 

Lastly, the specific market you are investing in will determine the rent growth, so make sure you research specific regions to understand if your region is in growth or decline.

Regional market differences

Real estate markets vary widely by region. For example, some states have stricter landlord regulations than others. Similarly, property values may be dropping in one city and going up in another. 

In fact, right now, there is a stark divide between housing markets in the West and the East. In the West, home values are generally falling, while in the East, they are still rising. Staying on top of such trends can help you decide where and how to invest.

Pro tip: Use PropStream’s Property Search to identify where home values are rising and where they are falling.

Other market trends

Finally, pay attention to other real estate market trends. For example, the rise of remote work during the COVID-19 pandemic and the failure of many return-to-office policies since then have left many office buildings vacant or underutilized. This puts downward pressure on commercial real estate values, which can indirectly impact the value of nearby residential properties. 

Similarly, the shift to remote work created pandemic boomtowns, many of which are now suffering the most from market corrections. 

Another unique trend to note is the recent boom in new construction homes. According to the Wall Street Journal (subscription required), “Newly built homes accounted for nearly one-third of single-family homes for sale nationwide in May, compared with a historical norm of 10% to 20%.” 

The reason? There is a massive shortage of existing home supply. While these new homes may be good investments in and of themselves, the increased supply may also dampen the rise in nearby home values.

Final Verdict

As you can see, market conditions vary, but there are always ways to adapt your investment strategy to them. For example, you may need to pursue seller financing when mortgage rates are high, make a cash offer to sweeten the deal in a seller’s market, target off-market properties when housing supply is low, or consider a fix-and-flip strategy to avoid losing profits to a looming market correction. 

Whatever you do, remember to take the long view. There may be short-term risks, but any property held long enough usually goes up in value. In real estate, time in the market usually beats timing the market.

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Important note: PropStream does not offer financial advice. This article is for educational purposes only. Please consult a financial professional for further assistance.

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.