Unlike other investment alternatives, Real Estate is a Physical Asset Class. A tangible asset such as a piece of land, apartment, or condo can never disappear, thereby leading to fraudulent practices. You can always do your Due Diligence and know for sure if your “to be added” investment in your portfolio exists.
“Buy land, they’re not making it anymore.”
– Mark Twain
Our all-time favorite American writer and humourist rightly predicted the state of depleting available land space. With the given amount of land and a constant rise in the population, a situation is bound to rise- Scene of Scarce Availability of Land.
Now, if you are ready to invest some of your resources in Real-Estate syndication take care of the following factors before finalizing a market location.
- Median Income Growth
- Job Growth
- Population Growth
- Tenant/ Landlord Laws
- Cost of Living
- Crime Rate
- Local Government
- Price to Rent Ratio
Median Income Growth-
Median Income Growth implies the standard of living in a locality. A 30% growth in the last 15 years is considered ideal. It conceptually determines the economic growth over the distribution of a few years. You would not want to invest in a stagnant location, where the prospects are almost negligible.
New residents are likely to move in a location with upcoming projects and new businesses. An upward scaling trend of Job Growth indicates a healthy, steady, and flourishing living location.
It may seem weird at this point but you should opt for locations with increasing population growth. But aren’t they going to be crowded?
The answer is NO! Population Growth is indicative of diversification and housing units’ modifications and improvements. It is the key to urbanization which in turn leads the way to incoming residents.
Nobody wants to get themselves into petty landlord/tenant issues. Residents prefer a location with liberal and friendly landlords. Investing in such neighborhoods is a smart resort.
Cost of Living
Location with a low cost of living in comparison to median income growth is preferred because a steady growth is expected in the coming years. With everything becoming expensive people tend to look for neighborhoods with cheaper living costs.
Before investing in a property, the crime rate is the factor that you should look out for. A safe neighborhood is any resident’s dream location. The lesser the crime rate is the safer and sounder is the neighborhood for families and students.
Local Government plays a vital role in the development of any locality. A strong supportive government paves the way for the locality towards developments and experiences inflow of companies, projects, and initiatives.
Though it may not seem to be a considerable factor, it determines the affordability of any investment in the near future. It helps you to make a timed decision while investing in any property. A ratio range between 15 and 23 works well for any investor.
Consideration and Thorough Analysis make a huge impact on your investments. You do not wish to go for ill-aided or stagnant neighborhoods where your capital is bound to go down the drains.
Our goal is to earn the maximum secondary income we can from our diversified passive investment portfolio. An easy way to do the due diligence is to contact local brokers, friends, or families in the given locality. You can always go online and search the web for websites such as- citidata.com, landlordstation.com, Zillow.com, Homevalues, Yardi Matrix, or Apartment List.
You will come across various deals but the secret lies within the selection of the most profitable ones according to your goals.
“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”
– Franklin D. Roosevelt, U.S. president