Before you dive into real estate investment, you should take time to consider the best place to buy. Your decision shouldn’t be based on your personal preferences, but rather what the data says about the area and what the future of the area looks like. You will want to invest in a strong real estate market, if you’re going to make the effort.
What Does A Hot Market Looks Like
The first piece you need to know is what a good real estate market looks like. A hot market will be in high demand, have low vacancy rates, significant job growth, and planned future development. The more in demand an area is, the higher real estate prices will climb. However, you don’t want to sink all of your money into one area, only to find it is not able to sustain the demand either to bad infrastructure, politics or the something similar. Take your time to really get a feel for the area before you make your purchase, or build your foundation.
Property Data
You will want to study and analyze as much data as possible for your chosen area. Most property information is public record, so you will be able to get a good idea of sales history and market trends. Check with a property appraiser and building departments throughout your desired zones. You can even get information from websites such as Zillow, Redfin and Trulia. There are apps that allow you to take a photo of a house and receive the property’s information on the spot! Study houses you are interested in and even the ones you aren’t! This will help you paint a clear picture of what is happening in the current market!
The Local Story
Discovering the proper market takes more than analyzing what’s on paper. Take some time to drive the neighborhoods and take note of what’s going on. How many houses have for sale signs out front? Are there rehabs and renovations taking place? What do the houses look like? Do people take pride in their community? You will want to get the real story on the area from people who live there. Consider visiting a local pub, beauty shop or grocery store. Talk to locals to learn all you can about a specific neighborhood. There is no greater gauge of a neighborhood than the people who live there, and the best way to get the real scoop is to hear it from the locals.
Consider Major Trends
There are major trends to consider when looking for a hot real estate market. Look at the data of where people are heading. For example, as baby boomers retire, they are heading to places such as Florida and Arizona. While this isn’t new, you should look at communities in these areas that are the most “retirement-friendly.” Millennial’s are heading to places such as Washington, Oregon and Texas. Small homes are popular, but not embraced in all areas yet. If this sort of investment appeals to you, make sure you are looking in a community that supports it.
It can be tough to find the hot markets at first glance. Sometimes it takes a little digging and connecting with the right people to help you along your way.