For real estate professionals, keeping up with current trends is vital in a constantly evolving market. Between sustainability, portfolio diversification and the expansion of technology like AI and virtual reality, making wise real estate investment decisions today requires thorough knowledge of the opportunities and challenges on the horizon.
Below, 19 Forbes Business Council members each share one real estate investing trend likely to emerge in 2025, as well as the potential impact each trend will have on investors.
1. Increased Spending On New And Existing Properties
Real estate investors are indicating a stronger growth mindset for 2025, with plans to increase spending on both existing and new properties while diversifying their portfolios. There is notable interest in renovation projects and expansion geographically and by property type. These trends are expected to support the growth of rental property businesses and facilitate expansion into new markets. – Ryan Barone, RentRedi
2. More Demand For Flexible Spaces
In 2025, real estate trends will be shaped by hybrid work, leading to demand for flexible spaces in prime locations while balancing accessibility and remote work needs. Sustainability will be critical as more investors and tenants prioritize eco-friendly, durable properties. This means buildings are being increasingly evaluated on emissions and resilience to floods and extreme weather. – Beate van Loo-Born, PhysikInstrumente (PI)
3. A Shift Away From High-Risk Areas
In 2025, there will be an uptick in investors systematically moving away from high-risk areas due to insurance exposure and rental cancellations. This may include the Southeast with increased hurricane risk or the Northwest with heightened wildfire risk. This will open up opportunities for investors who have more risk tolerance and may offer even greater opportunities for first-time homebuyers in these areas. – Nathan Miller, Rentec Direct
4. Second-Tier Market Investments
Housing demand will remain high, perhaps too high for opportunity investors. I recommend searching for and securing undersupplied markets that would normally be considered second-tier. Invest in markets with accessible healthcare and advanced educational attainment. Think small-town Midwest and inter-mountain West. – Henry Delozier, GGA Partners
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5. AI-Driven Property Analyses
In 2025, AI-driven property analyses will dominate real estate investing, leveraging predictive analytics to identify high-yield opportunities. This trend will empower investors with precise market insights, reduce risks and enable faster decision making. However, it may also increase competition, raising property prices in data-highlighted hotspot and challenging investors to adapt swiftly. – Shehar Yar, Software House
6. Portfolio Diversification
Today’s market has led investors to diversify their investments in various real estate classes and industries, as it offers a sense of relief during times like these. I believe that despite declining interest rates, real estate investors may still hesitate to invest in rental properties until the market shows more certainty and consistency. – Jordan DeBrincat Mintzas, Altree Developments
7. Increased Social Impact Investing
Social impact investing will continue gaining favor within the investment community as people recognize the cash flow stability in affordable housing. All things being equal, when given the opportunity, most investors will want to do well with their investments while helping others. This is especially true considering the safety and maturity of the asset class and emerging opportunities in workforce housing. – Seth Gellis, Community Preservation Partners
8. More Demand For Eco-Friendly Real Estate
In 2025, we’ll likely see a surge in demand for eco-friendly real estate driven by rising climate awareness and incentives for sustainable building. Investors who prioritize green properties may see higher ROI as tenants and buyers increasingly prefer energy-efficient, low-carbon spaces. This trend could also lower long-term costs and increase property values. – Stephen Nalley, Black Briar Advisors
9. Prioritization Of Water Availability And Flood Risk
A key trend in 2025 real estate investing will be new focus on water availability and flood risk, driven by climate change. Investors will increasingly assess properties for climate resilience, as overlooking these factors could lead to significant losses like potentially seeing investments “washed away.” This shift may drive demand toward properties designed to withstand environmental risks. – Raquel Gomes, Stafi
10. Rising Interest In Mixed-Use Developments
Expect a surge in mixed-use developments in secondary and tertiary markets. These properties cater to shifting lifestyles, offering live-work-play environments while benefiting from affordability and growing populations. This will result in diversified income streams and strong returns but also come with longer cycles and rising competition. This trend aligns with sustainability and urban decentralization. – Alejandro Martinez, Propelling Tech
11. Increased Desire For Shared Workspaces
In terms of business spaces, I expect more companies–especially small ones–will flock to shared workspaces. Since so many WeWork competitors have come on the scene and remote work has taken hold, having flexible but expansive and beautiful spaces can be a real game-changer for small- to mid-sized businesses. – Emily Reynolds Bergh, R Public Relations Firm
12. Partnerships Between Small Investment Firms And Larger Organizations
I would expect to see more small entrepreneurial investment firms partnering with banks, REITs and insurance companies to offload risk related to commercial real estate. With Wall Street driving fear and punishing commercial real estate holders, savvy investors smell opportunities. – Ed Barry, Capital Bank
13. Growth In Co-Living Spaces
Co-living spaces are set to grow in 2025. With rising housing costs and changing lifestyles, more people are looking for affordable, flexible living arrangements. For investors, this means higher rental yields as co-living setups maximize space and appeal to a broader tenant pool. It’s a smart, sustainable way to meet demand while addressing affordability challenges. – Goro Gupta, Ethical Property Investments
14. Digital Infrastructure Investments
A big trend we’ll likely see in 2025 is more investment in digital infrastructure real estate like data centers, server farms and cell towers. With the rapid growth of cloud services, 5G and AI, the demand for these facilities is outstripping supply. This makes digital infrastructure properties increasingly valuable for investors. – Sabeer Nelliparamban, Tyler Petroleum Inc.
15. The Rise Of Data-Driven Investing Platforms
A key trend in 2025 is the rise of data-driven investing platforms using AI and machine learning to identify lucrative real estate opportunities. This shift will help startups and managers make better decisions, reducing reliance on traditional market speculation. By analyzing large datasets, these platforms will offer predictive insights with high accuracy. – Michael Shribman, APS Global Partners Inc.
16. Standardization Of Virtual Reality Tours
By 2025, virtual reality tours will be the standard first step in property investment decisions, saving time and resources in viewing properties. This shift will make real estate markets more accessible and efficient, benefiting investors with faster, more informed decision making. – Ran Ronen, Equally AI
17. Hyper-Targeted Marketing
2025 will see real estate investing pivot toward hyper-targeted marketing, driven by deep data insights. Investors who tap into niche trends and leverage advanced data analysis will pinpoint motivated sellers with precision. Efficiency will soar, competition will tighten and those clinging to broad strategies will find themselves left behind in a more strategic, data-driven landscape. – Greg Clement, Realeflow
18. A Rise In Property Prices
I anticipate a rise in property prices. This will not diminish investors’ interest in purchasing real estate, demand will remain strong and the desire to invest in property is likely to grow even further. The only factor requiring close attention is upcoming tax changes, as tax burdens are likely to increase, making it an essential consideration in investment planning. – Jekaterina Beljankova, WALLACE s.r.o
19. More Focus On Sustainable, Energy-Efficient Properties
In 2025, real estate investing will increasingly focus on sustainable, energy-efficient properties due to stricter regulations and growing environmental awareness. Investors who adopt green features early may benefit from higher demand, increased property values and tax incentives. However, there will be upfront costs for retrofitting, which could be offset by long-term savings and higher returns. – Raheel Sheikh, Acquisitions LLC
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