The southern and western regions of the U.S. hold the highest growth rates, per data from U.S. Census Bureau, with cities in Texas, Florida, and Arizona topping the list. Workers searching for an all-around great place to reside might find spots like Green Bay, Wisconsin, and Huntsville, Alabama, appealing, as these communities rank first and second in the U.S. News & World Report’s list of Best Places to Live. Raleigh and Durham, North Carolina, followed by Boulder, Colorado, come in close behind.
When it comes to real estate investing, statistics like these can serve as a starting point—yet there’s much more legwork to carry out when choosing the best spot. The adage “location, location, location” still rings true today. It’s one of the most important aspects of the game, and the features surrounding the property you acquire will play a key role in its current and future values. As such, you’ll want to carefully note the landscape before making a bid. Use the following guidelines to help you begin your search on the right foot.
Choose Familiar Territories
If you’ve lived in the same neighborhood for the past decades, you’re likely in tune with its best features—along with areas that could be improved. Use this insight as a competitive edge. As you walk around, check for signs that indicate missing features. Is there room for another coffee shop on your block, or is the area saturated with cafes? Are residents having trouble finding housing close to downtown? The answers could help you spot opportunities to invest in a property or change an existing location to better suit the neighborhood’s needs.
Learn The History
Research how properties in the area you’re considering have been used in the past. Why were they first built? How have they changed over the years? Also review zoning codes or tap an expert who knows the local laws. The exercise will help you think about the possibilities for upgrades or renovations, along with understanding your limitations. There might be rent regulations in place, for instance, or codes that inhibit the way a structure can be modified.
Meet The Locals
When I started on the real estate scene 25 years ago, I was assigned a territory in the Chelsea neighborhood of New York City. I spent the following three months studying it and getting to know the people there. I talked to everyone from the small business owners to the building superintendents and the residents. I soon learned the spaces were set for a transformation: seemingly overnight, art galleries started popping up and replaced the flea markets that had been there. The new construction attracted additional amenities, including businesses and the nightlife scene, all of which presented incredible options for investors who were in the know and got in at the right time.
Check For Trends
Changing neighborhoods could present strong opportunities. In New York City, four new subway stations are opening in the Bronx. Think about the real estate potential around those stops. Retail values are set to increase, as shops and restaurants cater to the influx of foot traffic. The opposite can be true too: in areas where residents are leaving or offices sit empty, properties may not be considered as valuable.
When considering drivers for an area, check for tenant relocations and expansions. Tesla
TSLA
AMZN
Smart investors look not only at population growth, but also future jobs. Considering which cities have the most job postings can be an indicator of a growing market. Track new store openings too. Companies like Starbucks
SBUX
When it comes to choosing a location, there’s little that tops getting out and walking the neighborhood. Use the intel you gather along the way to build your business plan. You can then share your idea with your partners or team and take the next steps forward. If you time it right, you could get a great deal in a prime location that provides long-term returns.
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