How can you invest in top markets?
It sounds like it would be a difficult process, but it’s not as complicated as you think it would be. The same aspects of research, due diligence, and understanding of the deal you want to make. Naturally, if you’re considering going into commercial real estate versus residential, those specifics change things.
For either investment, I want to share with you three things to consider when you’re looking at investing in top markets in 2021.
1 – RESEARCH
Researching is critical. Being able to see how the area is developing is the best tool to be able to estimate how well your property will do there. As you’re checking out the area you’re thinking about investing in, make a list of everything you like about the property. Make sure to look at local businesses, where essential facilities are like hospitals and airports. Convenience will always be something that is on your side.
Checking crime rates, local politics, rental rate growth, home price appreciation and population migration will help you get an understanding of how the current situation is. If you see that the population is booming, institutional capital has made a presence, then you’re looking at great signs for your investment.
2 – MAKING A DEAL
Don’t jump on a deal because it’s there. At this point, you know that there is more that goes into a deal than anything else. Make sure you have a team of people that you trust to help you decide on a deal. If anything, find a contractor you trust that can help you understand the timeline of renovating a distressed property and if you have the means to get it to where you want it to go. Having the financials, tools, and experts around you will set you up for success.
3 – LONG TERM PLAN
Just as important as making a deal, make sure you have a plan before signing the dotted line. Most renovations are going to take months if not years and being able to see a return on those investments will take longer. Be realistic with your plan and be aware that any investment is a calculated risk. The more certainties you can set out in front of you the better off you’ll be.
As a reminder, there’s no crystal ball that tells us where the next top market will be. Do your research, check out properties, and you might find that the next hot market is closer to you than you think. I hope these three tips help you invest in top markets and set you up for success.
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