Those who are always banking money in real estate know the market. Experience has taught them location and trends. They’re hip on where new developments are being planned, transportation is being built, schools are being placed, pretty much everything about the location they are planning on investing in. Nowadays, you have to know it all be successful. To stay one step ahead of your competition in real estate you have to be consistently doing your homework. When you’re a newbie to the business it can be scary, so in this article we’re gonna teach you a few practices that the pro’s use to get ahead of trends, not behind:
1. Studying Local Pricing
If you’re looking to flip a home first things first, let’s study current price trends in the location you’re interested in. For instance, potential investors should compare and contrast homes in the area of interest, with homes in neighboring areas to see which area pricing is accelerating faster. The key here is to find out where the demand is higher. Also, studying these trends will over the course of time, develop the skill of knowing what is a good deal on certain properties and what is just plain old overpriced. This as you can probably tell, is a VERY VALUABLE skill to possess. If you’re looking to purchase a rental property, pricing is important but more importantly examine local renting trends. For example Baltimore, MD was recently named by Realty Trac and Bigger Pockets as the #1 grossing rental market in the nation. This is an important piece of information to know especially if you’re looking to maximize your monthly cash flow.
2. Look for New Infrastructure
A huge clue that an area is an up-and-coming area of development, is seeing signs of new infrastructure (i.e. transportation, sewage, water and electric systems). Seeing new systems being built showcases that the community is being primed for more future development. Driving by an area and surveying through your car window you should see some construction work, traffic lane widenings, and installments of traffic lights. All of those are signs pointing to expected increase in traffic flow.
Then you should take a trip to the town hall to get some answers from the road and building departments. If they take their job seriously, they should be able to tell you exactly what projects are going on and might even be able to connect you with someone on the state level that can get you hip on any development plans for state owned properties or roads as well. Also, Real Estate Development Firms and Real Estate Agencies (the good ones) also know what projects are going on so utilize them as well!
3. Look For Low-Tax Options
When comparing two towns, if one of them has a higher property tax than the other, the one with lower tax is almost always more in demand. Again with this info, your friendly investment specialist or real estate agent can make this simpler for you by telling you which areas are better when it comes to tax, however even a call to your local tax assessor can give you a more professional grade of information when it comes to how much a city charges in taxes per $100 per house. It’s important to also watch to see if there is a reassessment in line for the future which may bring the property taxes up! Be cautious of neighborhoods and communities that are becoming overcrowded, look for signs of school over-filling and bad traffic flow. Which translates to more construction to accommodate the rush of people moving in, and of course construction is paid for by tax money so you should understand why we’re telling you to look for low tax options.
4. Check School Rankings
Quality of education is an easy selling point to most new homebuyers, so watch the list of schools moving to the top of the curriculum food chain. To find the info on this just simply look to your state’s board of education website. In the case of purchasing rental properties this is less relevant because school rankings often don’t indicate popular rental areas.
5. Watch outer layer areas
Whenever a major city becomes overpriced the outer crust of areas will very likely be in high demand. Especially if that area is near a train or major bus station, areas that are close to these public services always see a spike in demand. To check for upcoming trains or bus stations, consider looking up these stations’ respective company websites or even the local town hall or planning department. Thrive Development group specializes in these areas because not only can you still purchase a rental property for a very low price, but in 3-5 years these areas will go up significantly in value.
To Wrap Up
Most information is attainable if you just ask. Doing your research before you take action in real estate, will always keep you ahead of the curb like the pro’s and not behind it like the uninformed.