Finding below market properties and profitable flips can be one of the hardest parts of real estate investing. Yet, it is a necessary step to find that next great real estate investment. Sometimes it can be difficult determining if the area you are interested in is worth pursuing. Thus, you may find the perfect property, but if the neighborhood is not prime for investing, you could waste precious time and money. Although you won’t be occupying the property you purchase, you should choose an area that you feel comfortable about. Think like a prospective homeowner or tenant since they are the buyers for this new investment. Whether you are fixing and flipping or interested in becoming a landlord for a rental, here are some prominent signs of up-and-coming neighborhoods for investing in real estate.
The crime rate for an area says a lot about its potential for real estate investing. Areas with high crime rates are not going to be as appealing to buyers or renters, especially ones who wish to raise their families in safe neighborhoods. Check your local crime reports and see what the level of criminal activity has been and what types of crimes.
Investors should research what homes have sold for and rented for in the past few years. Typically, rising prices are a great indicator of an area’s increasing value. If sellers or landlords are able to get the higher prices they are asking for, this means people really want to live in this area, so investors should follow where prices have seen a steady increase.
Available Real Estate
Likewise, neighborhoods in high demand will see a smaller inventory of homes for sale or for rent. If investors want to know whether the area they are interested in is worth the investment, look at the number of vacant homes or on market homes. The formula is simple and obvious – if it is a great area, people will be moving in. Vacancies for rent and homes for sale will be lower than other areas nearby.
Days on the Market
If an area is highly desirable to buyers or renters, the days a home sits on the market should be short. Investors can research what were the average days a property was for sale or for rent in that area and see if that number has slowly shrunk. If homes are going fast, it is an encouraging sign for an area’s potential for positive investing.
If an area appears to be a good investment, odds are bigger companies will also be taking notice. See which businesses and companies are already located there, and if any new ones are coming to town. With these businesses in town, the real estate market will be more appealing to renters and buyers who are interested in the job opportunities and economic growth potential for that area.
Is the neighborhood putting in a new park for the kids? Are the old streets being repaved? Are houses around the area being renovated? If the neighborhood is seeing some new developments, this is a good sign that the area is worth vetting. Upgrades to older neighborhood features will attract people’s attention. Similarly, if homes are being rehabbed and updated, this is a promising indicator that people want to live there. If you have found an area that is ready for investing, you’ll need the perfect financing options to go along with that perfect property. Apply for a fix-n-flip or rental loan with Cushner Capital Group (760) 845-9035! DRE# 00865708/NMLS# 305266