2025 Real Estate Investment Trends: What Experts are Predicting

I spoke with Martin Seeley, CEO & Senior Sleep Expert at Mattress Next Day, who highlighted why short-term rental investors must approach this strategy with a long-term mindset. “Short-term rentals maximize occupancy and minimize risk,” he said. “Investors should focus on properties that perform well year-round, not just during peak seasons. Diversifying listing platforms, adjusting pricing strategies, and ensuring strong guest reviews can keep a rental profitable despite market shifts or new regulations.”

Another key to success is making your rental stand out. Travelers today aren’t just looking for a basic place to stay; they want a unique experience. Properties with personality — like cozy cabins, modern lofts, or beachside cottages—often attract more guests than standard apartments.

A well-designed space, high-quality photos, and thoughtful extras like free coffee, local travel guides, or board games can also make a big difference in reviews and pricing.

One downside of short-term rentals is that they come with higher operating costs. Unlike long-term rentals, where tenants pay utilities and handle cleaning, short-term rentals require constant maintenance.

Cleaning fees, furnishing costs, property management, and fluctuating occupancy rates all impact profitability. If you live far from your rental, hiring a reliable cleaner and possibly a property manager is essential to keep things running smoothly.

According to Zhixin Zhang, Marketing Director at LeadsNavi, “Short-term rentals can be a great source of income if managed properly. But choose the right location, offer a unique and comfortable stay, and plan for the extra expenses that come with this type of investment.”

Build-to-Rent (BTR) Properties

Traditional real estate investing often involves buying existing homes and renting them out. But in 2025, build-to-rent (BTR) properties are becoming a smarter option. Instead of purchasing an older home that might need repairs, investors are partnering with developers to build new homes specifically designed for long-term renters.

The demand for rentals is higher than ever. Home prices and mortgage rates have made it harder for people to buy, so more families and professionals are choosing to rent.

And they aren’t just looking for apartments — single-family rental homes in suburban areas are in high demand. These renters want modern, energy-efficient homes with backyards, garages, and extra space, which is exactly what BTR properties offer.

Steve Morris, Founder & CEO of NEWMEDIA, sees BTR as one of the best investment strategies in today’s market. “The smartest investments aren’t just about what’s profitable now but what will continue to grow in value. With homeownership becoming less accessible, rental demand will only rise. Investors who put their money into build-to-rent properties today are securing long-term appreciation and stable returns in a market where traditional real estate strategies are becoming riskier.”

One major advantage of this strategy is lower maintenance costs. Since everything in a BTR property is brand new, investors don’t have to worry about costly repairs or renovations right away.

New homes also tend to attract long-term renters, meaning fewer vacancies and more stable income. Families looking for a rental home are usually willing to sign longer leases, and they often take better care of the property.

“The main challenge with build-to-rent investments is the upfront cost. Because these homes are built from the ground up, investors have to wait until construction is complete before they can start renting them out. This means there could be a delay in generating cash flow, and construction costs can sometimes go over budget,” as said by Andy Slack, Founder of Health Nutrition.

Invest in Secondary & Tertiary Markets

For years, real estate investors focused on big cities like New York, Los Angeles, and Miami. But with home prices in major metros skyrocketing, smaller cities and suburban areas — known as secondary and tertiary markets — are becoming much better investment opportunities.

One of the biggest advantages of investing in smaller markets is affordability. Property prices are much lower than in major cities, which means lower down payments and smaller mortgage payments. This makes it easier to start investing without needing a huge amount of cash upfront.

Plus, with fewer investors competing for properties, it’s possible to find great deals that wouldn’t be available in high-demand areas. “Investing in smaller markets gives you more room to negotiate and secure properties at a better price. Unlike major metros where investors are overbidding, secondary markets allow for smarter buys with higher long-term returns,” shares Richard McKay, CEO & Managing Director of Sprung Gym Flooring.

Another reason these markets are growing is that more people are leaving big cities. Remote work, high living costs, and the desire for more space have pushed many people to move to smaller towns and suburbs.

Cities that used to be overlooked — like Boise, Chattanooga, and Huntsville — are now experiencing population growth, which means increasing demand for housing. Investors who buy in these areas early can lock in lower prices before the market catches up.

However, investing in secondary and tertiary markets isn’t without risks. Unlike major cities where property values tend to rise steadily, smaller markets can take longer to appreciate.

If the local economy is weak or job opportunities are limited, it can affect rental demand. That’s why research before investing. Look for places with growing industries, good job markets, and steady population increases.

Eyal Pasternak, Founder/CEO of Liberty House Buying Group, “In major cities, it’s tough to build a portfolio without deep pockets. But in emerging markets, investors can buy multiple properties for the cost of a single unit in a big city. That diversification reduces risk and increases overall returns.”

REITs (Real Estate Investment Trusts) & Real Estate ETFs

Not everyone wants to deal with tenants, maintenance, or buying physical properties. That’s where Real Estate Investment Trusts (REITs) and real estate ETFs come in. They allow you to invest in real estate without owning actual property. Instead of buying houses or apartment buildings, you buy shares in companies that own and manage real estate properties.

REITs work like stocks. They own income-generating properties such as apartment complexes, office buildings, shopping malls, and warehouses. Investors earn money through dividends, which come from rental income collected by these properties.

In an interview, Gerald M, Growth Marketing Expert at Cricketscore.io, says, “A lot of people think of real estate as just buying property, but the reality is, direct ownership ties up capital and limits flexibility. REITs let you stay exposed to the real estate market without being locked into a single asset.”

The biggest advantage of REITs is that they offer passive income without the hassle of managing a property. They are also more liquid than physical real estate, meaning you can buy and sell shares quickly without waiting months to close a deal.t options provide steady returns, portfolio diversification, and real estate exposure without the need for large upfront capital or hands-on management.”

House Hacking & Multi-Unit Investments

House hacking is one of the easiest ways to get started in real estate, and it’s still a smart strategy in 2025. The idea is simple — buy a property, live in part of it, and rent out the rest to cover your mortgage and living expenses. This is commonly done with multi-unit properties like duplexes, triplexes, or fourplexes, but it can also work with single-family homes by renting out rooms or a basement apartment.

The biggest benefit of house hacking is that it lowers your housing costs. Instead of paying a full mortgage yourself, you use rental income from tenants to help cover the payments. In many cases, this can allow you to live for free or even make extra money each month.

I spoke with Raviraj Hegde, SVP of Growth at Donorbox. He pointed out, “The real power of house hacking is how it positions you for future investments. You’re not just saving on housing; you’re building equity with little to no personal expense. That equity can be leveraged into more properties, allowing you to grow your portfolio faster.”

Another advantage is that financing is often easier for owner-occupied properties. Banks offer lower down payments and better interest rates for buyers who live in the home themselves. This means you can start investing in real estate without needing a massive amount of cash upfront.

However, being a live-in landlord comes with challenges. You’ll have to share your space with tenants, which isn’t for everyone. You’ll also be responsible for managing the property, handling maintenance, and dealing with potential tenant issues. Choosing the right tenants is crucial to avoid headaches.

Jake Smith, Founder of DVLA Number Plates, adds, “For first-time investors or those looking to build wealth with minimal upfront costs, house hacking is one of the best real estate strategies. It allows you to start earning rental income immediately while reducing your personal housing expenses.”

Commercial Real Estate (CRE) Opportunities

Many investors focus on residential properties, but commercial real estate (CRE) offers some of the biggest opportunities in 2025. While office spaces took a hit during the work-from-home boom, other sectors — like industrial warehouses, self-storage units, and mixed-use developments — are growing.

Industrial properties are in high demand due to the explosion of e-commerce. Companies like Amazon, FedEx, and other logistics businesses need more warehouse space than ever. This trend is expected to continue, making industrial real estate a strong investment choice in 2025.

Another option is real estate ETFs, which bundle multiple REITs together into one investment. This provides diversification, reducing the risk of relying on a single type of real estate. Some ETFs focus on specific sectors, like residential, healthcare, or industrial properties, while others spread investments across multiple real estate categories.

The downside to REITs is that you have less control over your investment compared to owning real property. Market conditions, interest rates, and economic downturns can affect their performance. Plus, while REITs provide steady income, they don’t always appreciate in value as much as physical properties do.

“For investors looking to grow their wealth without the day-to-day responsibilities of managing properties, REITs and real estate ETFs offer a smart, low-maintenance alternative in 2025, adds Erick Recors, Founder & CEO of Fullbloom Greenhouse.

Eric Andrews, Owner of MI&T, believes, “Unlike residential rentals, where tenant turnover is frequent, commercial leases tend to be longer and more stable. The key is identifying properties in high-demand sectors — industrial warehouses, medical offices, or self-storage — where businesses have long-term needs, ensuring a more predictable cash flow.”

Self-storage units are also a great option. More people are downsizing, moving, or working remotely, which has led to higher demand for storage spaces. Since these properties require little maintenance and have low operating costs, they provide steady cash flow with fewer headaches than residential rentals.

Mixed-use developments — buildings that combine residential, commercial, and retail spaces — are also becoming popular. These properties generate multiple streams of income by offering apartments, office spaces, and storefronts all in one location. With cities focusing on walkable communities, mixed-use properties are positioned to grow in value.

The challenge with commercial real estate is that it requires more capital upfront, and vacancies can last longer compared to residential properties. Businesses have specific space requirements, and finding the right tenant can take time.

Marney Dornan, Founder of Marneys Tidbits, said, “For investors willing to research market trends and pick the right type of commercial property, CRE can offer higher rental income and long-term appreciation.”

Fractional Real Estate Investing & Crowdfunding

Fractional real estate investing and crowdfunding are some of the most accessible ways to enter the real estate market. This strategy allows investors to pool their money and collectively own shares in income-generating properties.

Instead of buying an entire property, you own a fraction of it and earn a proportional share of the rental income and appreciation. This approach makes real estate investing possible even for those with limited capital, providing an alternative to traditional property ownership.

Paula Mixides, Link Building Expert at Cake Box - Birthday Cakes, explains, “For decades, real estate was limited to those who had the means to buy entire properties, but technology is changing that. Now, investors can participate in high-value projects with far less capital, allowing them to diversify and gain exposure to real estate markets that were once out of reach. The key is understanding which markets and property types have long-term growth potential.”

Real estate crowdfunding platforms simplify the process by offering pre-vetted investment opportunities. Websites like Fundrise, RealtyMogul, and CrowdStreet allow investors to choose from a variety of real estate projects with as little as a few hundred dollars.

Some platforms specialize in specific property types, such as multifamily buildings, hotels, or industrial spaces, while others offer diversified portfolios across multiple asset classes. Investors can select projects based on risk tolerance, expected returns, and investment timeframes.

In an interview, Peter J. Product Owner of Fanpass, shares, “One of the key reasons fractional investing is gaining popularity is its ability to spread risk across multiple properties. Rather than putting all capital into a single building, investors can own fractions of several properties in different markets. This diversification reduces the financial impact if one property underperforms.”

Plus, because properties are professionally managed, investors benefit from real estate appreciation and rental income without dealing with day-to-day operations.

However, fractional investing does come with limitations. Investors don’t have direct control over decision-making, as management teams handle acquisitions, rental strategies, and property sales. Liquidity can also be a challenge—while some platforms offer options to sell shares on secondary markets, others require investors to hold their shares for a set period before withdrawing funds.

“Fractional real estate investing and crowdfunding continue to expand as technology makes real estate more accessible. For investors who want to participate in real estate without large upfront costs or hands-on involvement, these platforms provide a practical and scalable way to build wealth through property investments,” mentions Dan Close, Founder and CEO at We Buy Houses in Kentucky.

Wrapping Up

So there you have it — solid real estate investment strategies for 2025. Whether you’re looking for passive income, long-term appreciation, or quick flips, there’s an approach that fits your goals.

The key is understanding where the market is headed, choosing the right strategy for your risk level, and staying flexible as trends shift. Real estate is one of the best ways to build wealth, but success comes down to smart investing, not just buying any property and hoping for the best.

Do your research, stay patient, and focus on opportunities that make sense right now.