Rural areas have been experiencing a renaissance in the recent couple of years, with their first population increase in a decade. With lower housing costs, increasing business opportunities, and market gaps that are ideal for investors, the US countryside presents opportunities for business enthusiasts, real estate investors, and young professionals seeking more affordable housing.

However, while rural areas offer significant potential, they also face considerable challenges that require strategic solutions.

What Needs to Improve for Rural Communities

Rural areas make up 97% of the territory, but only 20% of the population lives in the countryside. Although this population consists of various communities that rely on agricultural resources, forestry, natural gas and oil reserves, coal mines, and tourism, most of these communities face similar challenges, including:

• Limited access to financial services – Most unbanked and underbanked Americans live in rural areas that lack adequate banking facilities, while also lacking proper internet infrastructure to use online banking.

• Lack of infrastructure – The lack of infrastructure typically includes poor transportation, limited broadband access, and insufficient healthcare and educational facilities (not in all rural areas).

• Economic isolation – The geographic isolation of remote areas limits access to larger markets, reducing business opportunities and economic diversification.

• Aging population – Almost 85% of older-age counties (with over 20% of the population 65 or older) are rural counties. This reduces the workforce while increasing the need for healthcare facilities.

The Role of Government and Private Sector

Both the government and the private sector have vital roles in fostering rural development — they can foster economic empowerment and improve social inclusion, health, and education by cooperating on solutions.

On its side, the government incentivizes business, housing, and conservation efforts through various programs aimed at rural development.

The private sector, including telecommunications, energy, traditional banking, and fintech companies, also has a role to play by providing solutions tailored to rural needs.

However, both can benefit from investing in the countryside.

Real Estate Opportunities

Rural areas present numerous opportunities for homeowners as well as investors, as land and property costs are typically much lower in non-metro areas. Financial institutions have a significant part to play in developing these areas by providing reasonable loans.

For Homeowners

At 81%, non-metro areas have a higher percentage of homeowners compared to metro areas. However, the poverty rates are higher in the countryside, leaving many people without an opportunity to qualify for a mortgage.

This typically makes conventional loans more difficult to attain, increasing the need for lenders who offer government-insured FHA and USDA loans, as they have low or no down payment requirements and more lenient requirements.

For Investors

Investors can also benefit from various loan programs designed to promote rural development. With the demand for rural housing rising along with the desire to move to the countryside, many areas are expected to grow in value in the coming years.

Loans for investors include rural housing loans created for developing rental real estate, as well as various business and industry loans that stimulate economic growth, green economy, and tackle the above-mentioned challenges. It’s also possible to get tax incentives for business owners in rural areas.

Business Opportunities

The US countryside is ripe with business opportunities — and the market is less competitive.

Banking and Fintech

Fintech companies and online banks can revolutionize access to financial services in rural areas. While there needs to be an improvement in connectivity, mobile banking and digital wallets can fill the gap left by traditional banks.

However, traditional banks are still important in rural areas, as the CFPB states older, less connected rural residents need physical banking more than other population groups.

Infrastructure

Public-private partnerships can help expand broadband infrastructure to underserved areas, and help the population reach better education, health, finance, and business services. Other key companies, including education and healthcare, may also find vast opportunity in underserved rural areas.

Agriculture and Agritourism

After education and health, agriculture is the second-largest sector in rural areas, with the USDA helping farmers through tax deductions and loans. Meanwhile, innovations in agtech, such as precision farming and sustainable practices, can increase productivity and profitability.

In recent years, 5.6% of farm revenue came from agritourism — activities such as horseback riding, camping, and offering rural experiences diversified income for many people, especially in Texas.

Energy Companies

With open land and abundant natural resources, rural areas often attract energy companies. The USDA encourages companies to invest in solar, wind, and other renewables, and provides specialized programs for them.

The Takeaways

The future of rural development is filled with potential, offering opportunities for homebuyers, investors, and business owners to fulfill their goals. Also, the challenges of poor infrastructure, lack of banking services, poverty, and economic isolation show where and how the economy needs to develop, especially as the population in these areas ages.