How To Invest in Real Estate During COVID-19

The U.S. housing market in 2025 is shaped by elevated but easing mortgage rates, tight-but-improving inventory, and moderate price growth, alongside a resilient labor market and a structural shift to hybrid work. Recent readings show the 30-year fixed mortgage rate averaging in the mid-6% to low-7% range per Freddie Mac PMMS, months’ supply hovering roughly in the 3–4 range on NAR Existing-Home Sales, home prices near record highs with low- to mid-single-digit gains on S&P CoreLogic Case‑Shiller, unemployment around 4% on the BLS, and consumer confidence fluctuating near its long‑run average per The Conference Board. Remote/hybrid work has stabilized around 28–30% of paid workdays, materially above pre‑2020 norms, influencing where people live and work according to WFH Research.

“Staying on top of the real estate market anytime can be challenging,” says Daniel Rodriguez, Director of Operations at Hill Wealth Strategies. “In a rate‑sensitive cycle, disciplined underwriting, liquidity buffers, and local market data are essential.”

Below we synthesize current research and operator perspectives on the ins and outs of different real estate transactions in today’s market, with live indicators sourced from Freddie Mac, NAR, Case‑Shiller, Fannie Mae ESR, and CoreLogic.

The 2025 U.S. Housing Market

NAR’s U.S. Economic Outlook and monthly Existing-Home Sales series show turnover remains below pre‑2020 norms due to “rate‑lock” effects and affordability constraints. Mortgage rates in the mid‑6% to low‑7% range per Freddie Mac PMMS keep purchasing power tight, while inventory has improved from recent lows but remains lean nationally at roughly 3–4 months’ supply on NAR. The labor market remains supportive with unemployment around 4% (BLS), and consumer confidence is near its long‑run average (The Conference Board), contributing to resilient demand even as affordability is strained.

Housing indicators snapshot (latest themes)

Dr. John A. Kilpatrick, Ph.D., MAI, serves as the Managing Director of Greenfield Advisors and the appointed Director of the Washington State Economic Development Finance Authority, an office given to him by Governor Jay Inslee. He is also an Adjunct Professor of Finance at Washington State University and a well-published author. He has followed the post‑COVID market closely and shares observations with us. 

“There are some choice buying opportunities right now for investors with cash, or a combination of cash and ‘staying power,’ who can take a long-term position,” he explains. “If you leverage properties, you have to consider the likelihood of vacancy, lease-up timing, and interest-rate volatility.”

Investors are seeing this firsthand: single‑family construction has been comparatively resilient while a large multifamily delivery wave in many metros has softened rent growth and lifted vacancies, especially in fast‑growth Sun Belt markets, per U.S. Census/HUD housing construction trends and industry leasing data. At the same time, mortgage performance remains strong nationally with delinquencies near historic lows on CoreLogic, reflecting tight underwriting and homeowner equity cushions.

Remote/hybrid work continues to influence demand and strategy. Roughly 28–30% of paid workdays are from home in recent readings (WFH Research), which supports suburban/exurban housing demand and puts ongoing pressure on commodity office. Leading office trackers show elevated national vacancy and office use plateauing around half of pre‑2020 levels (JLL; Kastle), creating selective distress but also repositioning opportunities.

At the same time, operators are adapting with digital lead generation, virtual tours, and incentive‑driven transactions (e.g., seller credits and builder rate buydowns). Buyers with flexible capital and longer horizons can find value where fundamentals are durable and supply pipelines are manageable.

For family offices and private investors, competition remains most intense in affordable tiers given limited inventory and rate sensitivity on monthly payments. Sound basis and multiple exit options remain critical.

Real Estate Investment Strategies in 2025

As the owner of one of West Michigan’s largest cash buyers, Lakeshore Home Buyer’s Ryan Dosenberry says that success in a rate‑sensitive cycle is all about strategy. “In my opinion, there is never a bad time to invest in real estate, as long as you buy right.”

He goes on to explain, “Buying right doesn’t always mean buying a property for pennies on the dollar but also buying in the right area for appreciation and making sure the property is cash flowing if it’s a rental.”

This year’s best practices align with post‑COVID capital rotation toward needs‑based housing, single‑family rental/build‑to‑rent, select healthcare/medical, and digital infrastructure, while avoiding or deeply discounting commodity, high‑CAPEX office, per PwC/ULI Emerging Trends 2025, CBRE’s 2025 Outlook, and JLL’s Global Real Estate Perspective.

Work your strengths: Start with a niche that fits your skillset and time. Operationally intensive segments (e.g., SFR/BTR, select-service hospitality, neighborhood retail) reward hands‑on management; more passive exposure can come via public REITs or private credit. The post‑COVID playbook emphasizes assets with durable demand and manageable capex (PwC/ULI).

Establish a comfort level: Define your tolerance for rate volatility and refinancing risk. Stress‑test DSCR and exits with higher coupons and wider cap rates; align debt (fixed vs. floating with caps) to the business plan using the rate‑impact frameworks outlined in FRED Fed funds and PMMS.

Be proactive: Monitor listings constantly, target off‑market outreach, and leverage builder incentives/temporary buydowns to bridge monthly-payment gaps (Freddie Mac; NAR).

Consider location: Hybrid work (≈28–30% of paid days from home) reduces commute constraints and keeps inter‑metro migration elevated—about one in four searchers look to move to a different metro—favoring affordable Sun Belt and lifestyle markets (WFH Research; Redfin migration). Starter homes in good school districts remain in high demand for buyers and tenants.

Communicate: Align early with sellers, lenders, and agents on contingencies, timing, and financing structure. Clear expectations can win competitive situations at similar headline prices.

Work social media: Consistent, transparent local‑market content—virtual tours, renovation diaries, underwriting assumptions—builds trust and inbound leads even before a listing hits the market.

As a CPA & Tax Strategist for Emparion, Paul Sundin sums it up: “The proven ways of investing in real estate are a mixture of sourcing, consultation, inspection, valuation, and negotiation.”  

How To Invest in Real Estate in 2025

Some investors already have playbooks tailored to 2025 conditions: prioritize durable NOI, conservative leverage, and business plans that don’t rely on cap‑rate compression. Public indicators point to gradual sales recovery as rates drift lower, with affordability constraints persisting (Fannie Mae ESR).

In rental housing, large multifamily deliveries in many metros create opportunities to buy post‑lease‑up at recalibrated basis or to focus on workforce housing where light value‑add (efficiency retrofits, unit refreshes) can support NOI. Single‑family rental and build‑to‑rent communities continue to benefit from space needs under hybrid work and limited for‑sale inventory (WFH Research; NAR).

Dosenberry takes a different approach at Lakeshore Home Buyer. “One tried and true method of investing in real estate is marketing for motivated sellers. Motivated sellers oftentimes need to sell their house quickly and may accept a cash offer under market value,” he explains. “If you’re new to investing, I’d suggest starting here. Once you have a hot lead and you get it under contract for a great price, the possibilities are endless. You can flip it, wholesale it, rent it out and cash flow it – the list goes on and on.”

Baseline forecasts anticipate modest improvement in existing‑home sales as mortgage rates ease, with home‑price growth remaining positive but moderate and new‑home construction stabilizing as supply‑demand rebalances (Fannie Mae ESR; U.S. Census/HUD).

2025 Outlook Highlights 

Market Projections (thousands)

We explore the pros and cons of different real estate properties.

Flipping Properties

Flipping properties—buying, renovating, and selling—requires precise scopes, cost control, and time management, especially with carrying costs influenced by higher borrowing rates. A 100 bps move in mortgage or project financing rates can meaningfully change holding costs and buyer affordability; rule‑of‑thumb sensitivities show a 1‑point mortgage‑rate increase reduces purchasing power roughly 8–12% for a typical 30‑year loan (PMMS). Underwrite multiple exit paths and conservative comps.

Red Ladder’s Owen Dashner talks about the fast profit. “When executing a successful flip, you can make large chunks of money in a short amount of time. I was able to quit my 20-year career because I made more money flipping houses than I did in my 6-figure corporate gig.”

The chance to custom-design a home can also be tempting to many, with Rodriguez adding that it is all your choice. “You get to reimagine a house and either completely tear it down or do modest renovations or no renovations at all.”

However, permitting backlogs, labor availability, insurance costs, and financing carry can complicate timelines and erode margins if not carefully underwritten. Keep contingencies for schedule slips and materials pricing; model buyer‑pool sensitivity to rate changes (PMMS).

“Flipping deals require rigorous contingency planning,” says Dr. Kilpatrick. “In a rate‑sensitive market, have multiple exit strategies and conservative sales comps.”

Adds Rodriguez, “There’s no guarantee a new buyer or renter will want the property. These reasons include overall economy, location and ‘style’ of the (new) property.”

Dashner adds that “flipping houses is not for the risk-averse.  It is a difficult skill to master, and there is the potential to lose a lot of money if you don’t know what you are doing (or even if you do). Unexpected expenses and carrying costs can really throw a wrench into your dreams of huge profits.”

Buying REITs

REITs, or real estate investment trusts, provide liquid, diversified exposure to institutional‑grade real estate and reprice quickly with interest‑rate moves. Public U.S. equity REIT total returns whipsawed since 2020: about −5% (2020), +41% (2021), −25% (2022), and +12% (2023) on the FTSE Nareit All Equity REITs Index (Nareit). Sector dispersion has been wide—data centers/industrial outperformed while office lagged—consistent with post‑COVID fundamentals (Nareit T‑Tracker).

Rodriguez calls an REIT a “low-risk real estate maneuver” because there is more of a hands-off approach for the investor. “You are not required to put down large sums of cash,” he says but adds that investors need to feel secure with their brokers. “You need to be able to feel comfortable with your broker and trust they will invest in real estate that will help you achieve your short- and long-term goals.”

“Behaving like stocks, REITs are easy to buy and sell, much more so than their underlying assets,” explains Dashner. “REITs are professionally managed. If you want a hands-off investment that pays dividends, give REITs a close look.”

Public REITs also tend to lead private‑market price discovery by several quarters; listed‑to‑private valuation gaps can create take‑private or JV opportunities when capital costs allow (Green Street CPPI).

However, Monoshia Dixon avoids REITs at Anassa. “I personally do not recommend this to anyone,” she says. “This is because you do not know where your money is going or if you are going to make any money from any REITs.”

At LP Property Group, Samuel urges caution. “If you don’t do enough research upfront, you could buy REITs that have poor financials, slash their dividends, and you can lose your principal investments.”

Buying Rental Properties 

Dixon much prefers rental properties. “Buying rentals is always the best way to make passive income,” she says. “This way can potentially help a person leave their current 9-5, because whether you have 2 units or 100 units. As long as you keep the building up to date/code and a great property management team, you will have a great asset.”

Rodriguez likes rental properties because they can be managed in a flexible, technology‑enabled way. “Simply invest in a rental property and have someone else manage the day-to-day operations of it,” he says simply. “You can remain in contact with this manager on a daily basis via video conference.”

Today’s rental market is bifurcated: elevated multifamily deliveries in many metros have softened rent growth and raised vacancies, while single‑family rentals benefit from hybrid work preferences for space and limited for‑sale inventory (WFH Research; NAR). Mortgage performance remains strong nationally with delinquencies near historic lows on CoreLogic, supporting credit availability for well‑underwritten deals.

Says LP Property Group’s Samuel succinctly, “Intelligently-purchased rental properties can provide stable cash flows over the long term while the property appreciates in value.”

“After all, says Dashner, “Someone is literally paying for you to own a house. Name one other asset class where this happens!”

“You are, typically, the landowner and maintenance person, so middle-of-the-night roof leaks or frozen pipes are a real possibility,” warns Rodriguez. “While your sleep may be temporarily disturbed, the on-going upkeep and maintenance may provide more inconvenience than what it’s worth.”

Samuel sees it happen all the time. “If properties are not intelligently selected, they can lose value over time and cash flow can be negative.”

Crowdfunding Real Estate Investments

“Crowdfunded real estate deals let you participate with other investors in deals that you normally would not be able to access on your own, which means less money from you in each deal,” says Dashner. “You won’t be the one swinging the hammer in these deals. They are professionally vetted and managed, you just sit back and enjoy the profits.”

Regulatory updates since 2021 expanded access and structures: the SEC raised caps to $5M for Reg CF and $75M for Reg A Tier 2, permitted testing‑the‑waters, and allowed SPVs for Reg CF to simplify cap tables (SEC final rule). In a higher‑rate world, many platforms emphasize shorter‑duration debt, senior loans, and preferred equity with tighter covenants (Deloitte CRE Outlook). FINRA highlights supervisory priorities for portals around communications, diligence, and cybersecurity (FINRA 2025 Oversight Report).

Says Samuel, “It’s passive, and there is not a lot of work involved. You essentially give your money to someone else, and they invest it for you. It’s a way to get exposure to real estate investing without doing much work on your own.”

Illiquidity remains a core risk—assume multi‑year holds and underwrite sponsor quality, fee stacks, and downside scenarios carefully. Verify the intermediary is a registered funding portal or broker‑dealer and that required filings (Form C, offering circular, Form D) are in place (FINRA Investor Insights).

Is Now a Good Time To Invest in Real Estate?

When it’s all said and done, investors have a decision to make – to buy or not to buy. Our experts answer that question.

“There is no such thing as a bad time to invest in real estate,” says Dixon. 

Samuel agrees. “At every time and in every real estate market, profitable deals can be found. With mortgage rates elevated versus early‑pandemic lows but easing from prior peaks, opportunities exist—especially where distress or recapitalizations reset basis.”

Key 2025 considerations 

Affordability and rate volatility shape outcomes: mortgage rates sit in the mid‑6% to low‑7% range (PMMS), months’ supply is roughly 3–4 (NAR), and home prices continue to rise modestly (Case‑Shiller). Hybrid work remains entrenched (~28–30% of paid days from home), shifting demand toward larger spaces and suburban/exurban locations (WFH Research). Mortgage delinquencies remain near historic lows nationally (CoreLogic).

Dashner agrees. “Become a great deal finder, and you will be successful in any market.”

Navigate Elevated Mortgage Rates

Current mortgage rates have averaged in the mid‑6% to low‑7% range over the past year (Freddie Mac PMMS). Use buydowns and seller credits to bridge affordability; stress‑test payments and refinance scenarios. As a rule of thumb, a 1 percentage point rate increase raises a typical 30‑year fixed payment by roughly 12% for the same principal—or reduces purchasing power by roughly 8–12% (PMMS). Align debt structure and hedges with your hold period, and maintain liquidity for contingencies.

“The most common strategies, flipping, buying and holding, and developing all have their time and place,” he adds.

Getting Home Insurance for Your Properties

Regardless of what kind of property you buy, it’s critical that you protect your investment with the right homeowners insurance. Small but effective additions like home security systems can boost neighborhood safety and award you with cheap homeowners insurance.

“I tell people it’s always a good idea to purchase home insurance for their property,” says Rodriguez. “Landlord insurance will generally cover the property and surrounding structures—such as fences, sheds, carports and external storage units on-site. This insurance protects against forces of man and nature – for example, a windstorm or a fried turkey fire. There are different rules and policies for landowners and homeowners, so I suggest they consult with their current insurance carrier for specific coverage needs.”

For 2025, investors should expect pricing and underwriting that vary sharply by geography and risk quality. Elevated counts of billion‑dollar disasters have pressured property insurance markets (NOAA), pushing some risks into state residual markets like FAIR Plans/Citizens (NAIC). California’s 2024 Sustainable Insurance Strategy aims to stabilize capacity by modernizing ratemaking (e.g., catastrophe models, reinsurance costs) paired with commitments to write in higher‑risk zones (CA DOI). Non‑weather water and fire severity remain focal claim drivers, prompting carriers to scrutinize roofs, plumbing/electrical, and vacancy status (LexisNexis; III).

Dixon errs on the side of caution at Anassa. “You want to make sure you are protected first, then your asset. This is because an intelligent real estate investor who owns multifamily housing will make sure their tenets will have renter insurance to protect themselves. With such a litigious society we live in, you want to make sure you are protected at all times,” she warns. “For investment properties, always do your research for insurance rates, because you want the max coverage.”

“Insurance for single-family rental properties works similarly to normal homeowner insurance by protecting the structure and fixtures of the property,” explains Dashner, “but it can also include other benefits that protect landlords from unpaid rents and damage to the property by tenants or their guests.  Contacting an experienced insurance broker will give you more options on the type of policy you need for your property.”

The Bottom Line

“It’s very hard to predict where real estate markets will head in the coming year, yet with hope of gradually easing mortgage rates, improving inventory from low levels, and a resilient labor market, there are many reasons to be cautiously optimistic,” says Ruban Selvanayagam, co-founder of the homebuying and selling company Property Solvers.

Operational themes matter: hybrid work remains entrenched (~28–30% of paid days from home), which continues to reshape housing preferences and commercial space needs (WFH Research; JLL). Forecasters expect a gradual recovery in sales activity as rates drift lower, with home‑price growth staying positive but moderate and mortgage delinquencies low (Fannie Mae ESR; CoreLogic).

It’s on par with NAR’s market readings, and at Red Ladder, Dashner also expects selective opportunities as bid‑ask spreads narrow and motivated sellers emerge. 

“I will always be a believer in residential real estate because people will always need a place to live,” he says simply. 

It’s a reassuring thought to investors the world over.