Looking to invest in real estate, but don’t know where to start? The first step is to train yourself to think like a professional real estate investor. You need to know everything about the area where you are planning to invest, and do your homework to stay ahead of your competition.
Below are some tips to get you started on the right foot:
Know the housing market: Study the local pricing. Is the price of homes accelerating faster in one area than in others? Is the average home price more than it is in neighboring areas? If you are able to answer these questions consistently, you will have a general idea of what properties are “fair” priced and what properties are overpriced.
Know the current job market: Whether it is job creation or job reduction, the job market significantly affects the real estate market. Expect a positive impact on the residential real estate sector if strong job creation is happening. The more quality jobs available, the more purchasing power consumers will have to spend on real estate. Likewise, should the opposite occur, significant job reductions will adversely affect the housing market.
Understand the Millennial generation: Consisting of individuals born after 1980, the millennial generation represents 27% of the country’s adult population, and they are making a big influence on the direction real estate investing is taking. They are foregoing the typical home in the suburbs that appealed to so many in the previous generations for more urban living. It is these millennials’ preferences that are setting the new real estate investment trends.
Be aware of your market’s surroundings: Pay attention to outside factors that can have an impact on your market, like the school districts and the surrounding housing markets. Check the school rankings for areas that have schools that are moving up or are at the top of the desirable school list. Access to quality education will help you big time when you go to sell as it is a big selling point to new home buyers.
Also, be aware of the outskirt areas. If the prices go up in major cities or towns, the areas on the outskirts will come into high demand. If the property you are looking at is in a nearby town to a high priced area, but still has easy access to that high priced area, it is a keeper.