Finding a good area to buy in is a science not an art.You can
rate areas by how many positive factors they have going for them.
Generally I would want 2-3 positive factors before I would look
at an area and then I would use the Property
analyzer to determine if any of the properties that you found
using the methods in Finding
Real Estate Deals were worth buying. The factors that define
whether an area is worth analyzing further are:
- Area changing to be a better neighbourhood or is already a
good neighbourhood
- The area is in a downturn in the housing market.
- A transportation improvement in the area.
- Recent increases in the values of raw materials or labour
in your area. (Cost of replacement goes up)
- Increased migration to your area.
- Demographics.
- Increase in average income in your area.
- Overall increase in demand
Area Changing
Houses in an area that is being upgraded can be bought
for low prices and sold when the area is finished it's transformation
for much more money. You can tell when an area is in the process
of re-inventing itself when there are many renovations happening
on the same street. Don't buy thinking that a transformation might
happen wait until it has already gained momentum. You should have
read articles on it in the newspaper or seen stories on the news
on how the neighbours are taking matters into their own hands
and cleaning up their neighbourhood.
Downturn in the Housing Market
If your area is currently in the sales doldrums, jump for
joy!!! It's the perfect time to buy. It's a buyers market and
you can get the property for the price you want to pay. This is
the time to do most of your real estate buying in that area. When
prices are high and sales are hot, do your selling.
Transportation Improvements
If you notice in your home town, whenever a new highway
goes in the houses that will be more accessible by that highway
don't go up in price until after the highway opens. But the government
lets us know it's plans years in advance. So buy those properties
when the highway is being built and you will have an increase
in equity when the highway opens.
Cost of Replacement Going Up
When the cost of materials and labour goes up it sparks
a set of events that causes new home prices to go up and the cost
of replacing your home to go up also. This is a case of the higher
the tide raises all ships.
Increased Migration to Your Area
This is a simple case of supply and demand . As there are
more people, the demand for housing goes up.As the demand for
housing goes up so does the price.
Demographics
If all the baby boomers find it desirable to move to your
area then it would be wise to buy before the prices get driven
up to intolerable heights. Remember that the baby boom generation
makes all the world go round.
Increase Average Income
As the average income goes up so does the price of house
that a family can afford. That increases the house prices in an
area and makes real estate investing fun!!
Overall Increase in Demand
This happens because who knows why but you know when it's
happening because there starts to be sales in hours instead of
days. There starts to be bidding wars. Your real estate agent
will be able to tell you if this is happening in your area.
Real-Estate-Haven
