Real Estate Investing Trends for 2023

Published On: October 28, 2022

Published by:
Entrust Capital Funding

If you’re looking to invest in real estate in the El Paso area and need real estate investment loans,  you’ve come to the right place. Real estate is one of the hottest investments in the country, and nowhere is hotter than El Paso. While it’s one of the best forms of passive income, real estate can be tricky and tends to go in waves. Therefore, it’s essential to be up to date on the latest trends and ideas to be successful in real estate and decide if you need real estate investment loans.

Are you looking to invest in real estate in El Paso and need real estate investment loans? You’ve come to the right place! Contact Entrust or call (915) 320-6633 today!

6 Real Estate Investment Trends to Watch Out for in 2023 

Rising Interest Rates 

One of the biggest things to be aware of if you’re considering real estate in 2023 is rising interest rates. From 2020 to 2022, interest rates were at near-record lows. However, because of inflation, a possible recession, and various other economic issues, interest rates are starting to climb again. 

They’re currently above 6.00% and are expected to increase even more. 

Inflation 

Inflation affects every aspect of the economy, including real estate in El Paso. As inflation rises, interest rates increase, and housing prices go up. Certain things associated with real estate, such as construction costs, rent, and labor, increase with inflation, which means that property does as well. Because of the high inflation, finding ways to mitigate your risk and lower costs as an investor is necessary. 

CAP and Property Rates 

The increasing inflation and interest rates have led to one of the lowest capitalization rates since 2008. Capitalization rate refers to the amount of expected return on investment. Ideally, you want the CAP to be close to 10% for maximum return on your investment. However, in the latter part of 2022, the CAP was closer to 6%. 

Unfortunately, inflation and interest rates are only expected to worsen, so you should be extremely thoughtful about any impending investments and which real estate investment loans you choose to get.

A Possible Recession 

If inflation and rising interest rates aren’t enough to worry you, a possible recession is looming. The economic boom from recent years is all but gone, as 2022 had not one but two negative quarters of GDP growth. 

The unfortunate truth about all recessions is that there tend to be job losses, which means less money. However, while people are losing their jobs, inflation is increasing, which means that money will be tighter than ever. As a result, only certain real estate markets are viable options for investment in 2023. It may be easier to enter these markets with real estate investment loans. 

It’s an Election Year 

While an election year doesn’t necessarily guarantee an uncertain year for El Paso real estate, it often has that tendency. As new government officials are elected, economic change is inevitable. The impending midterm elections, combined with inflation, rising interest rates, a possible recession, and an unstable economy, could spell disaster for inexperienced real estate investors. 

A Growing Interest in Short-Term Rentals 

The final thing to be aware of when it comes to real estate investing in 2023 is that short to mid-term rentals are more popular than ever. Air BnB, VRBO, Furnished Finder, and other websites specializing in rental options from a few days to months are growing in popularity. On the other hand, while long-term rentals aren’t necessarily unpopular, they simply aren’t trending upward. Real estate investment loans are a great way to start your investment journey.

Therefore, if you’re going to get into El Paso real estate, investing in short to mid-term rentals is a great way to get started. 

Who to Call to Jump on the Real Estate Train?

If you’re looking to get into real estate but lack the funding to get started, contact Entrust at  (915) 320-6633. We’re a capital funding investment firm willing to fund your dream of investing in El Paso real estate through real estate investment loans. Whether you’re looking to flip a home, purchase your first Air BnB, or get on the ground floor of a long-term rental property, Entrust is here to help.

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