My Realty Gains
It seems like evaluating a new real estate market, a challenging task.
Well, it is. As the majority of the beginners in real estate investing start dealing with the local markets. But not all local markets present the best opportunities. It is important to understand that there are way more options outside the local markets than you could ever imagine.
However, coming outside of the comfort zone is not everybody’s forte. But you can learn and practice it.
You see, there are various articles that talk about looking into the same metrics like population growth, household income growth, and employment growth, etc. They are helpful in evaluating markets but why not experiment with new concepts. This helps you in developing a mindset where analyzing a market won’t be a daunting task.
So here are a few suggestions for the real estate opportunists.
First, you should Identify the Best Markets
But just because we’re opportunists that do not mean you can start blindly purchasing real estate assets. One has to keep the fundamentals of investing in his mind.Let’s begin!
1: Look After How Diverse Employment Is in the Region
(Find out who are the major employers in the area)
So it is advisable to avoid such cities that are totally reliant on these types of employment. Until the pandemic is gone only then you opt for such cities.
We really don’t know. So, why to opt for such uncertain markets.
2: Find Out the Root Cause of Driving Demand for Property
The next thing to look at is the main drivers for your property’s demand. It can be a region that is reliant to a large corporation or any other single institution.
Another driver could be student housing. You see, this investment opportunity is only lucrative when the economy is flourishing. However, looking at the current scenario we are not sure about what the future might hold. It is better to have risk mitigation strategies in order to prepare for the worst, especially in real estate investing.
3: Choose between the Suburbs or the Cities
The next thing is to ask yourself a bunch of questions:
You see, there are enough contradicting results out there (online), where a certain percentage of millennials prefer to stay in suburbs (40% live in suburbs) and others (30%) in cities.
In suburbs, houses are not that expensive as compared to the posh cities. Also, environmental pollution is another factor that needs to be considered.
It is advisable to invest in affordable regions/cities. This can be done by looking at the income-to-rent ratio. (There are various metrics for evaluation of a region).
I believe that investing in a smart and sustainable city that focuses on pedestrian and public transportation makes more sense. Although the majority of the population in the United States prefers cars I believe that this new concept will have exponential growth in future. So let’s hope for the best.
Could you think of any other practical ways to evaluate a market?
If you’re still wondering where to
start from,we can have a
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