Grant Cardone: Why 2024 is the Year for Real Estate Investment

Grant Cardone, a prominent private equity fund manager and real estate investor, has long championed real estate as a powerful vehicle for wealth creation. As we approach 2024, Cardone believes that the current market conditions present unique opportunities for savvy investors looking to capitalize on real estate investments. In this article, we will explore Cardone’s insights on why now is the time to invest in real estate, the advantages of purchasing properties below replacement costs, and the anticipated surge in rental prices over the next few years.

The Current Real Estate Correction: A Buyer’s Market

One of the most compelling reasons Cardone advocates for real estate investment in 2024 is the ongoing correction in the real estate market. This correction has led to a situation where properties can often be acquired for less than the cost of building new ones. Cardone emphasizes the importance of considering replacement costs when evaluating potential investments.

For instance, he recently purchased a property in Tampa for $225,000 per unit, while the cost to construct a similar property today would exceed $350,000. This discrepancy highlights a significant opportunity for investors. Cardone notes that not only are buyers saving on the initial purchase price, but they are also avoiding the lengthy and costly process of new construction, which can take years to complete.

“Buying existing properties allows investors to bypass the lengthy approval and construction timelines,” Cardone explains. “If you were to start building today, you wouldn’t see completion until 2027. By purchasing now, you’re not only saving on costs but also on time.”

Shifting Focus: From Single-Family Homes to Multi-Family Units

Cardone urges potential investors to reconsider their strategies in light of the current market dynamics. He suggests that the focus should shift from single-family homes to multi-family properties, particularly apartments. According to Cardone, the current correction is primarily affecting the multi-family sector, making it an ideal time for investors to enter this asset class.

“If Americans want to tap into real wealth, they need to move away from single-family homes and invest in apartments,” Cardone asserts. “In 2008, single-family homes were the opportunity. In 2024, it’s all about apartments and larger complexes.”

He advises investors to seek out loans maturing this year on complexes with 40 units or more. By pooling resources and financing these assets, investors can position themselves for substantial returns in the coming years.

The Rental Market: A Forecast for Soaring Prices

Another reason Cardone is bullish on real estate is his expectation that rental prices will skyrocket in the next two years. He points out that the current economic landscape is creating a perfect storm for rising rents. With the average mortgage payment significantly outpacing average rent, Cardone believes that many renters will be forced to remain in the rental market, driving demand and, consequently, rental prices upward.

“The average mortgage is around $3,800, while the average rent is only $1,800,” Cardone explains. “As long as this disparity exists, rents will continue to rise because homeownership is becoming increasingly unaffordable.”

Moreover, Cardone highlights a looming shortage of rental units. With two-thirds of all apartments currently under construction expected to be completed this year, the pipeline for new rental units will soon dry up. This lack of new construction will exacerbate the existing shortage, leading to increased competition for available rental properties.

“By 2027 and 2028, we will not only face a shortage of homes but also a significant lack of rental units,” Cardone warns. “This will create a massive opportunity for those who have invested in rental properties now.”

Regional Insights: Where to Invest

Cardone also shares insights into specific regions that are likely to see significant rental price increases. He notes that areas such as Texas, Florida, Alabama, and the Carolinas are poised for growth. While rents may remain stable for the next couple of years, Cardone predicts a dramatic increase as demand outstrips supply.

For example, he points out that the average rent in Florida is approximately $1,900, while in high-demand areas like San Francisco, it can reach $5,700. As more people migrate to affordable regions, Cardone anticipates that rents in these areas will rise sharply.

Conclusion: Seizing the Opportunity

As we look ahead to 2024, Grant Cardone’s insights provide a compelling case for real estate investment. With properties available below replacement costs and an impending surge in rental prices, the current market presents a unique opportunity for investors willing to adapt their strategies. By focusing on multi-family properties and understanding the dynamics of the rental market, investors can position themselves for significant wealth creation in the coming years.

For those interested in diving deeper into the world of real estate investing, Cardone will be hosting the Real Estate Summit 2024 in Hallandale Beach, Florida, where he will share more strategies and insights for navigating this evolving market. As Cardone emphasizes, the time to act is now—those who seize the opportunity may find themselves reaping the rewards for years to come.