Over the past few years, we’ve all witnessed the dramatic shift to remote work in nearly every industry—and the finance sector has been no exception. Specifically, the landscape of real estate investing has undergone permanent changes, which have big implications for tech-savvy professionals like myself. As more companies embrace flexible work arrangements, demand will rise for certain types of properties best suited to this model, which will in turn create new and exciting opportunities in the real estate market. In this article, I’ll discuss how remote work is influencing real estate investments, and share some firsthand examples of how EquityMultiple is adapting its investment strategy to address these trends.
Embracing the Suburban Shift
Firstly, remote work has boosted the appeal of suburban and rural areas. Why is that? Since remote work—or “work from home”—eliminates the need to commute to urban offices (and may improve work-life balance), many professionals are seeking larger, more affordable homes outside of major cities like Boston or New York. As a result of this increased demand, there are a plethora of new investment opportunities in various suburbs across the U.S.
Here’s a personal example:
A few years ago, I invested in a suburban residential property just outside New Haven, CT. The development included spacious homes with dedicated home office spaces, which catered specifically to remote workers. The investment ultimately proved successful as remote work trends drove up demand.
Suburban home sales saw a significant uptick at the onset of the pandemic, with many buyers looking for more space—and a better quality of life—miles away from dense, bustling urban areas. This trend is expected to continue as remote work becomes a permanent fixture for many companies. I witnessed a similar shift as a real estate agent in 2020. As people moved out of New York City to nearby suburbs, urban rent rates dropped, allowing many to rent larger spaces in the city for less money to accommodate their new remote work lifestyles. This exodus not only transformed rental markets, but also underscored the growing preference for suburban living among remote workers.
Flexible Living Spaces
As the lines between “home” and “the workplace” become less and less distinct, the demand for flexible living spaces has gone up. Properties that offer multi-functional rooms allow residents to adapt spaces to their unique needs, whether they be work, exercise or leisure. Recognizing this trend, investors are seeking investment opportunities that offer a high level of flexibility.
Moreover, real estate properties in many major cities—luxury apartment buildings, especially—may feature communal areas for socializing, like conference rooms or party rooms equipped with fridges, speakers, couches, and more. These individual units may have bonus rooms that can easily be converted into home offices. This investment appeals to remote workers by fostering a sense of community, which is critical to mitigating the reduced social opportunities of a remote work environment.
Co-living spaces have gained popularity among young professionals due to their affordability and community-oriented ethos. According to a report by JLL, co-living spaces are expected to grow significantly in urban areas as a compelling residential option for remote workers.
The Rise of Secondary Markets
As remote work becomes more prevalent, secondary markets are becoming attractive alternatives to traditional urban centers. Cities that offer a high quality of life at a lower cost are seeing a surge in population growth and real estate demand. Investing in these secondary markets can yield substantial returns as they develop and expand.
For instance, EquityMultiple has recently offered investments into properties in Pittsburgh, New York, New Jersey, and Houston.
- Pittsburgh is known for its affordable cost of living and vibrant cultural scene, and consequently has become a popular destination for remote workers. A recent Pittsburgh investment from EquityMultiple includes residential units and coworking spaces that are designed to meet the needs of remote professionals. According to a study by PwC, Pittsburgh is ranked among the top emerging markets for real estate investments due to its strong economic fundamentals and growing tech sector.
- Despite the generally high cost of living, certain areas in New York are seeing more affordable living options that still reflect the vibrancy of the city. Mixed-use developments—including residential properties that can double as workspaces—have risen in popularity. In fact, the Urban Land Institute reports that the city’s outer boroughs, including Brooklyn and Queens, have experienced more investment activity as remote workers seek out affordable housing options that are not overly distant from the city’s densest areas.
- Close to major urban centers but offering more space and affordability, New Jersey has seen a rise in demand for properties suitable for remote workers. Investments in residential developments with dedicated home office spaces have been particularly successful. According to the New Jersey Economic Development Authority, the state’s strategic location and strong infrastructure make it an attractive destination for real estate investments, particularly in the residential sector.
- Houston is ranked as the premier, #1 market in EquityMultiple’s most recent Investment Framework rankings. The ranking is in large part driven by strong fundamentals, including multi-family supply/demand, rent growth outlook, demographic growth, and other qualitative factors.
Enhancing Property Value with Technology
Technology enhances the value of real estate investments tailored to remote workers. Smart home features, high-speed internet, and dedicated coworking spaces within residential buildings are important, if not indispensable.
I invested in a property in Connecticut that integrated smart technology to provide an optimal living and working environment. The property included high-speed internet, smart thermostats, and security systems, all controlled via a mobile app. These tech enhancements made the property highly desirable to remote workers and students.
The integration of smart technology in real estate is a growing trend that has also boosted the attractiveness of certain properties. According to a report by MarketsandMarkets, the smart home market is expected to reach $135.3 billion by 2025, owing to remote workers’ increasing demand for energy-efficient and secure homes.
Conclusion
The shift to remote work has presented unique opportunities for real estate investors like myself. By focusing on suburban areas, flexible living spaces, secondary markets, and tech-enhanced properties, I’ve been able to swiftly adapt my investment strategy to align with these recent developments. As remote work continues to shape the real estate landscape, staying attuned to these changes and being proactive in investment decisions will be imperative.
For young professionals looking to enter the real estate market, now is the time to explore properties that appeal to remote workers. By keeping such trends top-of-mind, you may be able to make additional progress toward long-term growth and profitability in your real estate portfolio.
At EquityMultiple, we are committed to identifying trends to keep our investors fully informed of opportunities for diversification. Our platform leverages technology, data analytics, and market insights to offer a diverse range of investment options across three pillars—Keep, Earn, and Grow—that cater to the needs of modern investors.
By adapting our investment strategies to trends like remote work, we can all build portfolios that are potentially more robust. Whether you’re a seasoned investor or a novice, it can never hurt to stay on top of the latest news.
The information contained in this article only represents my personal experience, and does not constitute financial advice. Consult a qualified financial advisor before making investment decisions.
