Is the Trend Your Friend? How To Take Advantage of Real Estate Cycles

It’s been said that change is the only true constant, never is this truism more manifest or more profitable than in the world of Real Estate investing. Time and again the same economic, social and geographical patterns play out in almost exactly the same order, regardless of time or place. However mere knee-jerk reactions to these same scenarios often cost property investors time, money or even their entire investment career. The following is only a partial list, yet these are the usually most influential factors in not only the national economy, but the fate of many investment portfolios as well.
Job Market
A quick glance at the size of the employment classifieds of a local paper should be enough to get a rough idea of just how strong the current job market is, although a more thorough approach such as contacting the local chamber of commerce will be warranted for larger purchases. Of course the serious investor should also bear in mind other factors such as local employers closing their business or the arrival of a new factory or other large employer. While an increase, potential or actual, is typically what drives investors to a new market, a sudden dearth of jobs may be just as good, if not better as an indication to buy. This must be balanced against the other indicators, however, and a good knowledge of the local area historically is also important to predict the success of a potential investment.
Land Development
The rate and price range of local land currently under development is one of the best indicators of the supply and demand ratio of any area. Also pay attention to what types of property are over or under represented. For instance, if there were an abundance of rental properties but a lack of office and industrial property would this be a wise area to invest in? Most likely not.
Direction of Real Property Value Definition Development
One of the most significant local indicators of where and how to invest is the general direction that new properties/developments seem to be moving in. Remember, when trying to determine the path of progress, that Real Estate is a relatively slow moving market. In order to get an accurate picture of the direction in which a city or town is developing be sure to look back at land, home, building sales for at least a few years. One of the easiest ways to turn a profit in Real Estate investing is simply to buy something in the path of progress and sell it on to a future investor as the newer buildings in the path of progress move closer and closer to it.
With time and a degree of luck, a seasoned investor can maximize their profits by knowing not only how to buy a property in the direction of development that will be easily sold or leased in the future, but also secure the lowest price and best terms Real Estate Marketing Course Online by purchasing that property at the bottom of the economic cycle. While this type of investing requires more risk management than is recommended for a novice, it is easily the most effective way to dramatically boost profits for the serious investor.

READ  US Real Estate Market Update 2010