BiggerPockets Daily

Mortgage payments are decreasing, which has some house hunters returning to the real estate market. According to the latest data from Redfin, for the four weeks ended Dec. 31, 2023, the median mortgage payment was down 14% compared to October’s all-time high. Meanwhile, the weekly average rate in early January 2024 was at 6.66% for a 30-year fixed-rate mortgage, compared to 7.79% in October.

This means homebuyers are finally getting a break from skyrocketing interest rates. And as rates start to dip, some house hunters are taking advantage of an uptick in listings. Redfin’s Homebuyer Demand Index, which measures requests for tours and homebuying services, was up 10% at the end of December from the previous month to its highest level since August, although it was down 6% year over year.

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As a real estate investor, you must always remember one thing: every type of investing strategy involves risk.

With that in mind, it’s good practice to learn more about low-risk real estate investing strategies. You may come to find that these provide the perfect balance of risk and profit potential. 

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In November 2023, Fannie Mae implemented a game-changing reduced down payment requirement of just 5% for two-to-four-unit properties for conventional loans. 

This presents a golden opportunity for house hackers looking to purchase or refi a two-to-four-unit property. However, few sources have broken down what this means for investors. Here, I’ll look at this new product, compare it to alternatives, and discuss what this means for real estate investors. 

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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:

So why did our clients’ properties perform when most others did not?

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