How To Spot A Great Investment Property Before Anyone Else

How To Spot A Great Investment Property Before Anyone Else
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If you’re looking to make the most out of real estate as an investment sector, then so much of the profit you stand to make could come from your ability to spot a hot area before the wider market knows about it. You don’t need to have insider info, nor any particular insight to be able to spot the early signs of growth in an area to invest in it. Often, you just have to know what to pay attention to. Here, we’re going to look at how you can spot a great investment property before anyone else.

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Keep An Eye On Areas Around Established Hotspots

If you have no idea where to start looking, then it’s a good idea to look at areas around where existing high-price neighbourhoods already are. If you hear rumblings of a city growing, then that growth naturally rises to spill out from areas that are already high in demand or too expensive for buyers and renters. The bordering locations might have lower prices, but that can start to change due to their proximity to a lot of hotspots. It’s not always guaranteed that these areas are going to grow, of course, so it’s important to wait until you see some of the common markers of an up-and-coming neighbourhood. Watch for indicators of growing neighbourhoods, like more foot traffic, retail openings, and improvements in public spaces. You might be able to secure a property before prices rise as demand spreads out from those hotspots.

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Watch Out For Infrastructural Developments

Paying a closer eye to any infrastructural upgrades being made to an area, whether by property developers or by government projects, can help you make predictions on where you might soon be seeing an increase in demand. New motorways, public transit expansions, and improvements to the utilities, amongst other things, can lead to or be a response to the growing demand for real estate in the area. Improved transportation links, in general, typically go hand-in-hand with a focus on business and commuters. Keep an eye on any city planning news and local authority announcements you can regarding upcoming projects. If you’re able to buy in the affected areas early enough, you can see a sizeable bump in property value. Of course, infrastructural developments can come from private developers, as well. It’s good to try to build contacts in that world to get the first news of these moves.

Pay Attention To Business News

One of the biggest markets of growing interest in an area, if there are major businesses relocating to or expanding in an area, you should pay closer attention to it. Follow your local business news and look for any headlines of new companies considering expanding to new areas. More business brings more jobs which brings more demand for housing. You want to make sure that you don’t jump the gun, as an early announcement might not always indicate that a business is, in fact, definitely setting up in the area. However, wait too late and you might be far from the first person to act on the news, buying after the value has already risen. You want to track down things like corporate announcements and expansion plans before they make it to the general public where possible. If you see any areas that are starting to get growing interest from tech startups, financial firms, and creative industries in particular, you should pay close attention as these are some of the hottest growing markets.

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Look For Where Construction Is Going On

If you see signs of construction in an area, then that should be an indicator to take a closer look at it. New construction sites often show existing confidence and investment in the potential future growth of an area. If developers and builders are actively working on new homes, apartments, and commercial spaces, then it could signal an increase in value about to happen around where the building is going on. Construction is one of the key signs of transition that you should be looking for. However, it is also a sign that’s very visible, often coming long after the news of businesses moving or infrastructural development. If you see new buildings in the process of being built, you may have already missed your chance to buy up property in the surrounding area. You should also be careful of the risk for projects to fall through. Abandoned projects can do the inverse for local property value, after all.

Keep An Eye Out For Demographic Shifts

It’s not always an easy thing to see play out in real-time. However, if you are able to see changes in the demographics living and operating in the area, it can show you the way to a big property investment opportunity. Young professionals, families, and retirees all have different housing needs and tend to look for areas that can cater to them. If you start to see these demographics moving in number to a neighbourhood, then it could be an indication of gentrification. Buying properties before word-of-mouth increases the popularity of the area or before supporting amenities, like schools, parks, and community centres start moving in, can help you get the jump on a major price boost. Keeping an eye on census data, local school enrollment numbers, and voter registration shifts can provide useful clues about an area’s changing demographics.

Connect With Real Estate Agents In The Know

If you want to know which areas are on the way up, then it’s always a good idea to connect with real estate agencies who focus on the town or city that you’re looking at. Routinely visiting the local property listings can help you better gauge demand, prices, and which properties are currently taking less time to sell. You can catch the trends in those areas by taking a data-driven approach, but you should also work directly with real estate agents, as they’re often the first to hear about off-market deals, price reductions, as well as changes in housing regulations in specific areas that can impact the property values there. Make sure that you choose agents who know the area in particular, too. Going for those whose interests are too widespread or generalized means that they might not have their finger truly on the pulse.

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Consider Who The Neighbourhood Appeals To

If you want to make a savvy investment, then you have to be able to sell it, as well. To that end, getting a good idea of your target audience is important. You want to have an idea of not just where they might be moving, but what they’re looking at. For instance, looking at the listings that your target demographic, be it students, young professionals, or retirees are looking at, you can get a better idea of what, exactly, they want. For parents, this can be good schools and playgrounds. For young professionals, it might be trendy coffee shops and coworking spaces. Align your knowledge of upcoming developments and business moves with what you know about buyer/renter wants.

See Where Rental Prices Are Increasing

Even if you are personally only focused on buying homes with the intention of selling them, it’s always a good idea to keep a closer eye on rental prices, as well. If the rental rates in a specific area are steadily climbing up, then it’s a good indicator that demand is also increasing in that area. What’s more, by buying in areas where renting is becoming more popular, you could also attract buyers from a potentially lucrative market: other property investors. There has been a rise in investors specifically buying up what rental properties they have to maintain a strong income portfolio. Look for sites that track rental data for an indication of where to invest.

Watch Out For Growing Cultural Scenes

Although it’s not always the most reliable indicator of growing house prices, nor always easy to see, a growing cultural and arts scene can indicate the shift of demographics and interest that are more reliable markers of growth. An increase in establishments like art galleries, music venues, restaurants, and boutique shops may also come with an increase in younger, creative individuals. It could be the first sign of a demographic shift that shows increasing interest in an area. These communities often tend to attract real estate investments as demand increases. However, it’s important to note that this real estate boost only tends to come if these establishments find success. A single art gallery opening up to little fanfare should not have you racing to put your money down. Keep an eye on cultural shifts in the area to pinpoint potentially trendy areas, but make sure that your risk is calculated and don’t jump the gun.

The pointers above can help you get started with spotting up-and-coming areas to invest in with the hopes of buying property before it skyrockets in value. How you put them into practice is up to you. There’s no such thing as a no-risk investment, so be sure to make your decisions as calculated and intentionally as possible.

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