Investors are often more attracted to the high demand and returns of real estate properties in urban areas. Whether they want to rent or eventually sell the apartment or the house, they can expect to earn more than what they paid for.
However, there are swaths of land for sale in the suburbs, and they are far less expensive than the spaces in the city. Moreover, the demand for it is not as bad as you may have assumed.
Here are the top reasons why you should invest in rural areas.
Pandemic Pushes People Out
Cities are prime locations for real estate. Every year, more people exodus toward capitals to get an education, open a business, or find a job. This has left the countryside unpopulated and underdeveloped.
However, recently, there has been a shift. More people are heading to rural areas and settle down.
The COVID-19 pandemic has proven that living in the city is not as ideal as everyone imagined it to be. When the government issued stringent stay-in-place orders to stop the virus from spreading, citizens were stuck inside their small apartments with nothing to do.
There are also way too many people in cities now. In every urban space around the world, crowds are inevitable. This makes the spread of diseases more probable than compared to the countryside where houses are few and far in between.
Since the lockdown has been lifted in many places in Australia, real estate agents located in small towns outside of Melbourne and Sydney have been very busy recently. Young people, in particular, seem to be growing disillusioned with the city with its endless traffic jams and the lack of green spaces. They have started looking out of their apartments and create a life somewhere else.
Cities Becoming More Expensive
The increasing cost of living has been encouraging young professionals to embrace country living. One report released earlier this year found that, between 2011 and 2016, Sydney and Melbourne lost Millennials (the generation born between the ’80s and ’90s) to the regions. Those who grew up in the regions, meanwhile, also stayed put or moved to other nearby regional areas in Australia.
It is not difficult to surmise why Millennials are leaving Melbourne and Sydney to live in the regions. The average house price in both cities has been rising in the past decades, making owning a house an expensive dream.
It is not just the real estate that has become unaffordable to Millennials. The cost of goods is on the rise, too, in the cities while wages remain stagnant.
Competition is not much of a problem in rural areas. There is an abundance of land, but there are fewer real estate investors fighting to acquire desirable properties.
In major cities, competition is fierce. Investors try to outbid each other and race to find the best available real estate property in the market. However, without competition, you have more choices. You can make acquisitions based on a promise, not simply on availability. You can take your time, assess whether a town or a neighborhood would increase in value over time, and add the best properties into your portfolio.
This allows investors to purchase multiple properties to expand and diversify their portfolios. You can build their wealth by buying a piece of land for cheap and then selling it for more money in the future. As the population grows, urban areas are constantly growing. Eventually, the barren space that you took a chance with a few years back has become part of a bustling community. Because of nearby development, its value considerably went up. Now you have an asset that everyone wants.
However, you have to take the risk and be patient. There is no guarantee that the investment will make you a real estate magnate.
Rural areas, unlike cities, have fewer people coming and staying. There are no tourist attractions and, therefore, no tourists to boost the local economy.
The public services may also not be up to par compared to what you get in urban areas. There might be fewer stores and restaurants or the hospitals and other emergency services may be farther away from your location.
The trade-off is, you get fresh air, clear skies, peace and quiet, and a sense of belonging within a loving community.
Finding success in real estate investing relies on who can foresee which properties will increase its value over time, and which ones may depreciate. However, there are opportunities waiting in rural areas that can deliver huge rewards to anyone willing to venture out of the cities and into rural spaces.