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Where’s the Best Place to Invest in Real Estate?

Where are the best locations to invest in real estate?

If you have enough experience investing in real estate, you can make money almost anywhere. But there are always places that are better or worse for real estate investing.

For maximum profits, you want places that have a better demand/supply ratio. You can use the questions below to find them…

Real Estate Demand

1. Does the area have decent job growth? Ask local authorities and use U.S. Census information. Ideally, you want to see job growth equal to or exceeding population growth.

You also want areas with professional jobs moving in. It’s estimated that for every professional job created, there are four service jobs created, and all those employees need a place to live.

2. Is the population growing? You can check the U.S. Census figures online or ask the local government if they have the statistics. Stay away from areas that have little growth.

movie theater

Are there fun things to do?

3. Is there a decent quality of life? It’s subjective, but important. Are there theaters and bookstores? Count coffee shops and cafes.

Trendy areas usually have increasing demand for housing. It’s also a good indication of a high quality-of-life if people are willing to take lower-paying jobs in order to live there.

4. Is there wealth in the area? It’s a good sign when there is some degree of wealth in a town. Look for nice homes. Wealth means everything doesn’t die when the economy slows.

Real Estate Supply

happy construction worker

How does the number of new housing permits compare to expected population growth?

1. Number of homes for sale? Lower supply of homes for sale means upward pressure on prices. This indirectly drives up rents as well, which makes for better investing.

2. New construction? Census figures can tell you what’s happened over the last ten years. Check with the local authorities to see if the the number of housing units they’ve issued permits for is more or less than the expected population growth.

3. Rent and vacancy levels? Rents have to be high enough, and vacancies low enough to justify investing.

When we first came to Denver, every building had vacancies We saw a man holding a sign that read, “Apartment – $250 Per Month.” A great place for renters, but not so great for landlords.

4. The available land that is buildable? Of course, less available land is better for future appreciation. When the land runs out, the prices start accelerating upwards.

Use these questions when you compare various towns and cities, and you’ll see the differences more clearly.

You’ll have an idea about how housing demand compares to supply in each area. This will help you pinpoint the best places to invest in real estate.

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About the Author...

William Bronchick, J.D. is a nationally-known attorney, author, and speaker. He has been practicing law and investing in real estate since 1990 and has been involved in over 2,000 real estate transactions.

Bill has served as President of the Colorado Association of Real Estate Investors since 1996. He is the author of many excellent real estate investing courses.

You can visit Bill Bronchick at his web site: LegalWiz.com

Comments

  1. Ilka Avramov says:

    Climate also plays a role. What advice do you give
    to commercial investors?

    • Charles Bolton says:

      Hi IIka, if I may I think the best advice for CRE investors is to look for a strategic location where there is foot traffic, accessibility, and near or inside Central Business Districts. Office spaces such as serviced offices are in demand right now and continuously changing the way we know the typical office space is. This is a type of investment that I think would really generate a lot of money.

What do you think? We would love to hear your opinion.

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