America Is A Nation On The Move. Here's How Investors Can Profit From It

During the COVID crisis, America saw an exodus from its major population centers in the Northeast and West to the South and the Sun Belt. 

Cities like Miami, Tampa, Dallas and Austin all offered lower costs of living while still having many of the cultural attractions as other big cities. As a result, their real estate markets exploded. The obvious play for real estate investors might be apartment REITs with assets concentrated in the Sun Belt.

Mid-America Apartment Communities Inc. MAA is an S&P 500 company with a heavy concentration in the Sun Belt. Over 55% of its portfolio is in Texas, Florida and Georgia. 

Camden Property Trust CPT is another S&P 500 REIT that has invested heavily in the Sun Belt. More than half of the company's net operating income (NOI) is derived from major markets in Florida, Georgia and Texas.

But there is another investment opportunity that is gaining popularity, especially as the stock market has become increasingly volatile. Private market real estate funds and fractional investing allow retail investors to be more selective in the specific markets and properties they invest in. 

One investment platform even allows individuals to invest in the growth of specific cities. While the median sale price of homes across the U.S. is up only 1.8% year-over-year, according to data from Redfin, prices in markets like Dallas and Miami are up 5.2% and 10.4%, respectively.

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Retail investors can also choose to buy shares of specific long-term and short-term rental properties in several markets across the U.S. In fact, Jeff Bezos made an early investment in a company that offers shares of rental properties with a minimum investment of only $100.

The benefit to these types of investments is that their performance isn't tied to the stock market. Share prices of private funds and fractional investments is directly related to the value of the assets and the income they continue to generate.

The downside, however, to some investors is the available liquidity. Redemption options are often limited within the target investment term. While this helps protect the long-term value of the investment, it's important that investors only contribute capital that they're comfortable leaving tied up for five years or more. 

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