Is Location REALLY that Important in Real Estate?
Welcome to another segment of our Smart Investor Quick tip series.
We’ve all heard the phrase “Location, location, location” with respect to real estate. Many investors purchase investment properties in their own back yard, and are very successful. Yet many are not.
It’s simple – Location. Real estate is all about supply and demand.
If you don’t have a steady pool of renters, then you are not going to attain the profits you want. So how do you get those renters?
Well , what is the main thing that brings people to a particular location?
Jobs create interest in a market. As new jobs gets filled the vacancy rate begins to decline. As supply is low and demand is high, higher rents can be achievable. Finding those markets that are about to or are currently experiencing economic growth, helps ensure the demand will be high.
Real estate is cyclical. It goes though periods of ups and downs. It’s understanding those upswings and down swings that helps investors decided when and where to buy properties to get maximum returns. Knowing where you are in the real estate market cycle should also contribute to you choice in exit strategy. It helps you determine which markets you will focus on.
To maximize those returns sometimes will need to look elsewhere than where you live. You need to create an experienced power team of real estate professionals in that market to help you source, buy, manage, and eventually sell the properties. This power team consists of brokers, property managers, attorneys, escrow companies, insurance companies, accountants etc. They know their markets. So even if you don’t know every nuance of that market…they do. Real estate is a team sport. So pick your players wisely!
Our business model is based on buying investment properties in strong performing markets. As real estate syndicators we want to maximize returns for our investors, so choosing the right location is important.
Learn more about emerging markets and how we choose our markets. Check out our video below from our first big stage presentation. Now keep in mind we are real estate investors and not public speakers. We were pretty nervous. We can’t be good at everything!! HA!
Well, that’s it for The Smart Investor Quick Tip Series today. See you next time!