There are certain characteristics or traits that every successful real estate investor looks for in an area before buying a home, whether to rehab, retail or wholesale. Knowing these five things can make a significant difference in the success of your exit strategy and in turn, impact on your profits.
These are all things that me and my coaches have been telling SREC students for years, because they can really make a big impact on your business. They are all elements that factor in to your investing sweet spot:
- Learn local pricing – Make sure you understand pricing trends in an area. What is the average home price here, compared to neighboring towns? You’ll not only learn which areas are in demand, but also understand what is considered fair pricing.
- New roads, shopping centers and schools – Where there is a new infrastructure being put in place, there is growth and the hint of an up-and-coming area, making existing homes more desirable.
- Find low-tax alternatives – A community’s tax structure can greatly impact your investing decisions. A community with a low tax structure will be more desirable than one nearby with a higher tax structure. Beware of communities that seem overcrowded – a tax increase to pay for infrastructure improvements may be on the horizon.
- Good schools – Strong school districts are a prime signal of a desirable area, especially to parents with young families.
- Outer suburbs – It’s no secret that with big cities usually comes big home prices. So that’s the time to look to the outskirts and snag the good deals while you can, because it’s just a matter of time before the population spreads beyond the city limits.
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