We all know what a big part location plays in property value, but it can be a challenge to determine which market, city, neighborhood, or even street you want to invest in. As you explore potential investment areas, try following these three steps to conduct a thorough evaluation of the pros and cons of each location.
Get to know a variety of markets, even if you’re pretty sure that you’re interested in just one or two; you might find an exciting opportunity in an area you hadn’t considered. These markets might be all in different cities or in a number of neighborhoods in just one city, but the important thing is to evaluate enough areas to make an informed decision about your investment.
Once you’ve identified a few potential investment markets, get to know each of them in greater detail. Important demographics to examine include unemployment rates, population growth or decline, trends for population age, the presence of a strong and diverse job market, and top employers for the area. You should also take a look at how other multi-family properties have fared over the past few years. Is there a large or growing number of vacancies, or are vacancies in multi-family properties quickly filled? You should make sure that, in addition to being a favorable market overall, it’s also a favorable market for multi-family investments.
After you’ve done your research, you should see some frontrunners emerging in terms of favorability. Take note of which markets have the most promising current or future conditions, and remove the others from your list to potentially revisit for a later investment. Once you have the markets down to a top few, you can start exploring properties in each of them.
Navigating through this evaluation process can be a challenge, especially for first-time investors or investors interested in an area with which they have limited familiarity. At Founders Grove, we thoroughly vet all of our opportunities before opening them up for investments, so you can be confident that each property is in a promising area. All that’s left for you to do is to determine if a given investment aligns with your investment goals