The pandemic impacted real estate in a wide variety of ways. Some of those, like the dramatic weakening of retail spaces and vacation rental properties, have proven to be temporary. But other changes appear poised to have lasting repercussions. While some are returning to offices as the pandemic winds down, many are expecting to enjoy more freedom to work remotely going forward. Here are three areas experiencing growth as a result and how real estate investors can take advantage.
Remote work is certainly nothing new, but its explosion during the pandemic has impacted real estate in several ways. Just how traditional office space will fare as more people work from home going forward remains to be seen. And as for residential real estate, the fact that fewer people are tied to cities by their jobs is making suburbia hotter than ever. People are taking advantage of the opportunity to trade apartments for single-family homes and some outdoor space of their own.
But although many are happy to give up the commute and spread out a bit, the fact remains that some need a dedicated space to go to every day to get work done. Whether they just don't have the space for a private office in their home or need more separation between work and home for a healthy balance, an increasing number of remote workers are making use of coworking spaces. Expect to see more of these spaces cropping up in the suburbs to meet this growing demand.
Whether in cities or suburbs, coworking offices are also sometimes part of the growing trend toward mixed-use properties. Nobody likes a long errand list that forces them to waste time in traffic getting from place to place. And just like a shopping center lets consumers combine multiple retail stops into one, mixed-use properties allow the accomplishment of a wide variety of unrelated purposes in a single location. This real estate might combine residential, self-storage, warehouse, retail, restaurant, and traditional or coworking office space in a single property.
Mixed-use properties that include some form of office space are especially interesting because they provide a sort of "captive audience" for everything else on the premises. If someone working at a mixed-use property needs self-storage space and there's an option accessible from the same lot they park in every day, they'd probably need to find an incredible bargain to consider going elsewhere.
They're also likely to frequent adjoining retail and restaurant spaces before or after work or breaks. An apartment in a mixed-use property is likely to be appealing for the same reasons. The ability to work, shop, and dine right where you live could be incredibly appealing.
Unique vacation rentals
The increased freedom of remote work has also been a contributing factor to the growth of vacation rental properties. And with the worst of the pandemic behind us, many people are ready to take to the skies and highways again and make up for lost travel time. While vacation rental properties, in general, are a hot item right now, those that stand out because of something unique or special about them are really getting a lot of attention.
Whether it's a farm property, a treehouse, a highly unusual design, or a home with a special history attached to it, unique properties are hotter than ever. So hot, in fact, that Airbnb recently added the ability to search for unique properties to its search function.
As people start getting back out there, they're doing it with an increased desire to experience something extraordinary. If you're thinking of purchasing a vacation rental, it may pay to think outside the box and consider a property that can transform your guests' stays into experiences.
Should you invest in these trends?
To be clear, the traditional office is far from dead. Many companies will continue to want their employees to physically come together in a shared space to foster comradery and collaboration. But many will allow for at least a hybrid arrangement where employees can work remotely some of the time if they so choose, and others have announced that their employees will be free to work remotely permanently.
If you want to take advantage of the real estate trends that are benefiting from this situation, it may be worth checking out some real estate investment trusts (REITs) or stocks that hold these types of properties or considering an interesting vacation rental purchase.