Finding the Perfect Real Estate Investment
by Marco Santarelli, Norada Real Estate Investments
TO MAKE SURE YOU ARE CHOOSING THE RIGHT MARKET TO BUILD YOUR REAL ESTATE PORTFOLIO, CONSIDER THE FOLLOWING:
ome investors, especially when starting out, crunch numbers
NO. 3 Supply and Demand A market oversaturated with
on one property after another only to get frustrated when the can’t find a deal where the numbers work well. Some ultimately give up looking. The problem is many of these investors can’t see the forest for the trees. So, what’s the problem? Why can’t they find a good deal? Odds are they are looking in the wrong place. That is, looking in the wrong market. The solution is to take a top-down approach and start with the right market. When it comes to investing in real estate, one cannot underestimate the importance and value of the market you invest in. To be successful, you need to start with the metropolitan area, then the submarket, then the neighborhood, and finally, the properties within the area.
housing supply leads to suppressed prices, rents and longer sales or lease-up times. One way to get a feel for an area’s supply and demand is by looking at what current landlords and property managers are doing (or not doing) to attract tenants. Offering a free month rent as an incentive is a sign that supply is high, and demand is low. And checking the MLS for a month’s supply of inventory will give you a good idea if it’s a Buyer’s or Seller’s market. When it comes to finding a worth - while real estate investment, one cannot underestimate the value of a worthwhile market analysis. Understanding the real estate market helps you focus on areas that are worth your time and investment capital as a real estate investor. As you gain more experience in analyz- ing markets, you will begin to devel- op a sense for what the future holds for a market as well. •
NO. 1 Employment:
People need jobs to pay for food, shelter, and clothing. A stable job market supports a healthy economy. An expanding job market supports a growing economy which attracts more people into the market and grows its population. NO. 2 Population Employment is one factor that leads to population growth. Weather can be another factor as is the case with southern states like Florida. Expanding military bases and large corporate expansions or relocations can also add to a city’s population growth. A growing population is an important factor when it comes to real estate investing.
COMMERC IAL REV I EW : : 7
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