Where you should invest in real estate now, according to four American experts

Rising interest rates have transformed the US real estate market in a matter of months, sometimes in unexpected ways.

Housing offers are limited, but there is a surplus of office space. Fears of a recession are driving prices down in some areas, while demographic changes are keeping them high in others. The higher fees cost first-time buyers, but those who can pay cash are getting deals. Homeowners are defaulting on debt, while homebuilders are seeing an increase in demand.

It's a confusing framework for anyone looking to buy or invest. However, market changes can also present opportunities. Those who witnessed the real estate effects of the financial crisis will remember investors who bought cheaper properties and sold them when prices recovered. Is this the right strategy now? Or should investors look at other property assets – or stay out of the market altogether?

To answer these questions, Bloomberg interviewed four experts about ideas for people who have about $250 in savings and are considering investing in the real estate market. The experts' ideas ranged from residential properties to rental homes in the Sun Belt (US region) to mispriced real estate operations.

A real estate investment trust is a company that owns and in most cases operates real estate that produces income.

Experts were also asked where they would make their investments with one at a similar price. Their answers included everything from New York City rentals to vacation homes on the California coast.

Bess Freedman, CEO of Brown Harris Stevens, suggests that buying a home can be a great asset to invest in the US.

Investing money in a home, she says, is a great way to build wealth across generations.

“It's the single largest purchase most Americans make and, with proper planning, it can be a tremendous asset. Unlike a stock portfolio, you can actually take advantage of your home. You can either live in it or rent it out and collect income while you wait for the property to appreciate."

On the other hand, Gary Beasly, CEO and co-founder of Roofstock, says it's good to invest in a single-family rental home.

“We're in a time of significant inflation risk, and I like to think of a single-family rental home as something like an inflation-indexed bond with an equity driver. A bond usually has a fixed coupon. A single-family rental home, with its own rental stream, has a fixed flow of payments. But every year you can reset it to a new rate to compensate for inflation. Then equity comes from your appreciation over time. The idea of ​​renting is also changing. People are waiting longer before they buy. High interest rates are preventing many people from buying. So this creates a real niche in the market for high-quality rental housing," he says.

Eric Branson, director of investments in the company Cynedo Wealth Partners, emphasized that perhaps it would be a good idea to invest in a house.

"Maybe you're going to have a baby soon and you need to buy now." But the significant increase in interest rates from two years ago has significantly changed the calculation of buying today."

Gavriel Kahane, managing partner at Arkhouse says that Americans are in a historically uncertain position regarding many important economic factors.

At the moment, according to him, it is not known when and where inflation will fall or where the risk-free rate will fall.

“What we do know is that this uncertainty has created a significant divide between the prices set by two distinct sets of investors – private equity and the public markets. The opportunity now is to find investments that are not favored by the public markets, but that other investors, such as private equity, would be willing to buy (and take private) at a premium. Hard assets are unloved right now and often mispriced in the public markets, but there is an unprecedented amount of private equity dry dust looking for real estate today. I see some real opportunities in that price dislocation," Kahane stated.

"I would invest in the public market and work with private investors to buy assets." /Telegraph/