With interest rates projected to decline throughout 2025, we expect to see the housing market pick up a bit this year.
The rate declines are good for buyers and investors looking to increase purchase power, while also incentivizing property owners to sell (knowing that they won’t take such a big hit from trading a low-interest mortgage for one with a much higher rate).
So what is Gatsby’s plan to capitalize on lower rates and provide strong return potential for investors? Here’s a sneak peek at Gatsby’s investment strategy for 2025.
Increase Housing Inventory
The Southern California housing shortage continues to be problematic for locals and for those who want to relocate to the area. As of May 2024, experts estimated that Los Angeles County alone needed nearly 500,000 units to accommodate the population, with specific emphasis on attainable housing for low-income households.
Of course this was before this month’s wildfires, which devastated families and communities across the area and destroyed more than 1,400 residential structures, resulting in a greater strain on current housing inventory.
While a lack of inventory tends to drive property values up, Angelinos don’t want to see home prices artificially inflated by purposely withholding inventory. Rather than creating a real estate bubble that could burst, we’re looking to build sustainable growth that balances housing attainability with strong returns.
That’s why Gatsby is committed to developing new housing units.
Multi-Family Developments
Multi-family developments are in high demand by renters who have been priced out of the housing market or prefer the simplicity and flexibility of renting over owning. These buildings are also in high demand by investors willing to pay top dollar for new-construction apartments already stabilized with new tenants.
Having completed dozens of developments in Los Angeles, Gatsby has the systems and teams in place to build these structures quickly and efficiently. The comparatively short build periods help us bring new units to the community while providing fast returns for investors.
Built-for-You
Our new built-for-you product provides a unique opportunity for investors to venture into multi-family real estate development without the time, hassle, and risk of traditional private development.
With our built-for-you program, we manage the acquisition and construction of your new development while you retain full ownership rights. When construction is complete and the building is fully occupied by new tenants, you can take over the day-to-day management of the stabilized property. Or we can match you with a well-regarded property management team to provide this service for you.
You get the benefits of a brand-new rental property without the high price tag of buying a new construction turn-key apartment building. No experience, specialty knowledge, or industry connections needed on your end! We take care of everything.
Together, we can bring new units to the market with this innovative investment structure.
Develop Affordable and Attainable Housing Solutions
There is a particularly high need for affordable and attainable housing in Los Angeles. Affordable housing means the monthly housing payment (including principal, interest, insurance, taxes, and utilities) equals no more than 30% of the gross household income. Attainable housing is defined as a residence that is affordable enough to be purchased by individuals and households earning between 70% and 100% of the local median household income (as established by the U.S. Census Bureau).
There are multiple ways to meet this growing need while maintaining strong yield potential for investors.
Section 8 Housing
Section 8 is a government-sponsored affordable housing program, designed to help low-income renters cover their housing costs. This program provides much-needed benefits for veterans, senior citizens, struggling families, and the differently-abled.
Because of the arduous application process for recipients of Section 8 vouchers, these tenants are often reliable and tend to remain in the unit for the long term, reducing turnover and minimizing vacancy losses for investors.
Tenancy in Common
Tenancy in common (TIC) is a type of real estate ownership where multiple individuals hold legal rights to the same property. Each co-owner possesses an "undivided" interest, meaning they share ownership of the entire property rather than specific sections, with their ownership percentage representing their proportional stake in the property.
TIC ownership is more affordable than single-family or condo ownership, providing a new path for homebuyers looking for attainable housing solutions.
And with our experience building multi-family structures, Gatsby already has the workforce and systems needed to develop TIC projects!
How to Invest with Gatsby in 2025
Gatsby’s investment opportunities are open to all accredited investors. You can explore our available real estate offerings and choose the project(s) that best align with your timeline and investment goals.
If you have any questions, our dedicated service reps are happy to assist you. Schedule a call with a Gatsby representative today!