We’ve all heard that “location, location, location” is the most important factor when buying real estate, right? But what is it about a specific location that you really need to know before choosing an investment market?
Location is one of the most im- portant factors to consider when purchasing investment homes. Our criteria take all life situations into consideration when determin- ing those locations. We look for areas that are already developed, that offer approximately 80 percent current home ownership where that ownership exceeds rentership and that have an active municipal- ity. We find those to be the most desirable areas.
Here are the top three factors I look at when evaluating a market:
MIKE D’ARRIGO FOUNDER AND OWNER PINNACLE
JOHN GUTMAN VP OF SALES AND ACQUISITIONS MACK COMPANIES
1 Is the population growing or shrinking? You not only need a grow-
INVESTMENT PROPERTIES
ing renter pool, but a strong and vibrant economy, as well. Healthy cities have growing populations and new household formation. Look for metropolitan areas with population growth that exceeds the national average. 2 Is the number of jobs increasing or decreasing? Some markets show decreasing unemployment rates, yet jobs are declining. Rather than looking at unemployment rates, which can be misleading, focus instead on the total number of jobs created and the industry sectors in which those jobs are located. Is there a broad-based employment base, or are jobs concentrated in a single industry? 3 Are incomes rising or declining? Rising incomes can drive up rents, increasing your cash flow and indicating a healthy economy. Not all income growth is equal, however. Many markets are seeing growth only in the higher-income ranges, which may or may not be representative of your prospective tenant pool. Fortunately, most of this data is available at your fin- gertips through the U.S. Census Bureau and Bureau of Labor Statistics. •
The next layer of criteria includes the following: distance to top-quality schools as well as to major highways, shopping, restaurants and nightlife and nearby thriving business commercial corridors. We look to follow on the coattails of the “big box” stores, as they’ve already spent millions of dollars on area market research. If they are there, we should be, too. Homes should be within walking distance of elementary schools so that young children can walk to school and parents do not have to worry about transportation to get them there. The homes also should be within three miles of a high school. We look for properties within five miles of major interstate and route access, as well as any public transportation such as Metra, CTA or PACE to make traveling between towns or into the city very easy for work or personal purposes. Homes should also be near areas that offer many options for the various types of shopping, restaurants and nightlife, as well as the essential occasional business needs.
These criteria demonstrate ease of living and continue to attract long-term homeowners and renters. •
WEB :: www.mackcompanies.com PHONE :: 888-494-5909
WEB :: www.investwithpinnacle.com PHONE :: 408-661-5903
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