Real Estate Investing Research: Things to Look For
Real estate investing research is so very important. Clarity in the real estate marketplace is power. Professional investors have it. Speculators and novices are always seeking for it. It’s why professional investors who understand the real estate market cycles and know how to research real estate markets can make more money in the longer term than speculators and ‘flippers’ can make in the short term. Gaining this clarity in the real estate marketplace is a function of examining hard data and asking objective questions of it.
Gaining this clarity in the real estate marketplace is a function of examining hard data and asking objective questions of it. What do I mean by that? While there's no "crystal ball" that will tell you where to buy property and when to buy, and when to sell, there ARE certain economic and social indicators we can use to trigger our decision to invest or not invest (and even HOW to invest) in a given geographic area at any given point in time in the real estate marketplace.
Together, these indicators that drive the real estate market cycles can be uncovered with good real estate investing research. It's a lot easier to focus your investing efforts when you can do two things, which this article will teach you how to do:1. Invest nationwide (or even worldwide), choosing markets that make sense for the current local real estate market cycle 2. Easily eliminate potential markets from contention that are less attractive than others right now.Please understand that these are macroeconomic factors, independent of where you live.
So you want to evaluate whether investing in a particular geographic area is a good idea or not. Successful investors understand that the real estate investing game is one of probabilities and not certainties. Therefore, when evaluating which real estate markets are ripe for investment, and which kinds of investments will work best at that time, you need to look for certain telltale probabilities converging before you buy in an area.
Let's say someone tells you that City XYZ is the "next big thing".
Would you want to take their word for it and just go and buy property there? No, you'd want to confirm what they told you, quickly and easily, by doing your own simple due diligence.
In point of fact, if you're like me--because your time is valuable, you'd want a simple "litmus test" of how to research real estate markets and evaluate potential possibilities. I promise you, no one is too busy for these simple tips you can use to gain a clear understanding of how the market trends work, see how to maximize your returns, find markets where the current real estate cycle fits the type and time-frame of investment you're looking to make, and even how to avoid investing in certain areas right now.
So…What about "City XYZ"…to invest or not to invest? What elements and probabilities do you base your decision on?1. You look for an area of strong demographic growth2. You look for a strong, growing, and diverse economy3. You look for an area of growing retirement and/or first-time home-buyer population4. You look for new and substantial infrastructure changes5. You only move into undervalued markets6. You look to acquire a property with strong potential for appreciation7. You look for contracting vacancy trends
If you buy property in an area that meets these criteria, looking to invest with a longer term exit strategy in mind, are observant of where you are in the local real estate market cycles, and you always provide the rental type that renters prefer in that area…you're set.
All of this sounds like common sense, doesn't it? Unfortunately, as someone once said: "common sense ain't common". In a small article like this I can't tell you where to get all the real estate investing research data you need, and nor can I explain the fundamentals of real estate market cycles (something economists are much better qualified for) but here's a great resource you can use from now on. This is just ONE of the insider sources real estate pros use to determine market trends (and when and where to invest).
Click the link below and look for the "Housing Price Index" which will show you the most recent report by the United States Office of Fair Housing Enterprise Oversight, comparing how much and how fast your house appreciates and goes up in value, compared with houses in all the other major metro markets in the United States: http://www.ofheo.gov
Where does your city rank? I must tell you that while real estate investing research is INCREDIBLY important, as is an understanding of how to position your efforts investing using knowledge of the current real estate market cycle your area in question is currently in, simply taking action as an investor is the most important step in the drive to success in real estate investing. It can also be the most difficult, because we are predisposed sometimes to want to see that all the lights are green ahead of us before we put our foot on the gas.
Of course, while knowing that would make it that much easier to make a decision, it isn't always that straightforward even when you understand how to research real estate markets and have a good handle on real estate investing research…this is because your own PERSONAL investment criteria, goals, and resources will determine what you can DO with what the market IS. That's why it's SO key to know your own investment criteria, resources and goals. Because if you add THAT to a fundamental understanding of the marketplace and the trends of RIGHT NOW…that is a powerful combination.
With those two pieces to the investing puzzle it's that much easier to take a look at a deal and decide to invest. Or if the probabilities aren't there and/or the deal doesn't fit in with your goals, you don't pull the trigger. It's that simple.
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ABOUT THE AUTHOR
If you’re serious about making money NOW in commercial real estate, while building long-term wealth, all by learning how to re-position yourself to achieve INFINITE returns then you must attend our next live educational online webinar with America’s #1 Real Estate Network™. Register here, right now as a guest of Danny Welsh and unlock the secrets to 6-figure pay-days and awesome monthly cash flow per deal.
Co-founder of both the Greatest Real Estate Giveaway and Real Deal Community social network for real estate investors, and a managing partner with HIS Real Estate Network, a commercial real estate buying group, Danny Welsh is passionate about two things: empowering real estate investors and entrepreneurs to get to the next level, and helping other business owners get better results with their marketing using mostly no cost and low cost marketing initiatives.