Real estate investors are usually searching the hottest markets. Where can they buy, and what can they buy, that will make them tons of money? It's not that hard to discover as long as you are able to get rid of the generic speech and determine what makes up a truly "hot market."
Based upon what Ken McElroy, author of "The ABCs of Real Estate Investing" says, a hot market is something that has a high demand but a short supply. For instance, if there is a plot of land on the water that seems unattractive, but is capable of being, that may turn out to be a piece of hot property. Often, even highly experienced investors will be unable to distinguish what is in front of their own eyes. If an investment property is overgrown, for instance, or needs a facelift, it may not look like a good deal to someone who is not paying attention. But the very fact that it is on the water, a place where people want to be, may make it worth having.
Yet Another type of hot property, according to McElroy, is a property with persona. He mentions the Venice Beach area in CA, which was featured in a movie called "Lords of Dogtown". This is a tough, edgy filmt full of surfers and skate boarders. It's cool, and the fact that a person lives there says to the world that they are funky, edgy and possibly talented. If you can purchase a piece of property in that area, there is instant interest, simply by reason of the "cool" factor.
Not all areas have persona, however. But they may have other things, like existing industry, or a big corporation on the way. Corporations bring jobs and jobs bring more people, who need homes to live in. If people are coming in from out of town, they are most likely feeling fairly positive-minded, looking forward to a new life in a new city with a happy new job. Their optimism can work in the investor's favor.
Military bases are great population draws as well, and not all military people live on base, as McElroy. points out. He also warns, however, that investors should be careful when counting on military bases, because military budget cuts can sometimes mean the closing of such facilities.
Good old visibility can also qualify a property as hot, or at least up it's "hotness" factor if it is indeed a advantageous place to live. Lots of drive-by traffic can be a positive thing. Drive-by traffic is free advertising. It also means that there are already plenty of people around the property, and typically means that the rental unit(s) is on the way to work for a lot of commuters. Maybe it would be a closer journey for some people, which is a good thing.
What it comes down to then, is that a hot market is property where the people are. If the area has a large population, or is looking forward to an increase in that population, that means there is a stable economy, and a stable economy is what will support your real estate investment business.
Finding Hot Markets For Buying Investment Property
By Alexandria Anderson
