Here's how to find those investment hotspots
The following article is supplied by Nate Zielinski (pictured) of RCN Capital.
In the competitive industry of real estate investing, forecasting trends in the market and where and how to find those trends is truly valuable information. There are so many resources and indicators available for investment opportunities that investors need to be aware of to maintain competitiveness in a fast-paced industry. Being able to identify these trends and knowing the indicators is the first step. The next step would be tracking down the resources where these indicators are readily available, then acting on them to create a successful investment portfolio.
Indicators of a trending location or investment hotspot
One of the first indicators every investor should be looking at when determining the attractiveness of a city or any new investment location is job growth and the overall health of the economy in that particular area. Yes, the economy is often viewed on a national scale, however there are pockets across the country that don’t always follow the national average. Investors should be zoning in on these locations and narrowing down their potential locations to invest in based on the economic activity in that specific area. Job growth and an upward trending economy is a surefire sign that families and young professionals will likely be moving there in the near term for work or to achieve their future plans. Two of the most reliable tenant profiles for an investor or landlord are young professionals who are living on their own for the first time and looking to rent, or newer families that are looking to set themselves up in an ideal location for their careers and their children’s futures.
Another indicator that follows closely behind job growth and the economy, is population. If an area sees a sharp uptick in population growth, investors can be certain there are investment properties up for grabs that can be used to house the influx of people to a certain city or state. This is where investors must dig a little deeper regarding these indicators. Properties won’t always be readily available directly in the center of areas of economic and population growth; however, the surrounding suburbs could prove to be extremely fruitful for an investor. Locating surrounding areas of the trending location could be the perfect investment hotspot. Investors can look for certain factors such as quality of schools or education, nearby amenities, and even traffic patterns which can lead to a certain suburb being more desirable than another.
Supply and demand are a telling metric in a lot of different industries and real estate is certainly one of them. Being able to physically be in the trending location and seeing just where the activity is taking place is massive for an investor. Where the “For Sale” signs going up, where new construction is taking place and, most importantly, what properties are being rented out or sold are all signals for an investor that they have found the right or wrong location.
Available resources for opportunistic investors
For investors to take advantage of trending location indicators, knowing where to easily find them is another important part of the process. As with most things these days, the answer can usually be found on social media. Investors have an entire network of colleagues, competitors, mentors, instructors, and everything in between when it comes to real estate content on social media. There will certainly be a plethora of videos and content regarding where to invest and in what property types. The real estate community on social media is very helpful by nature and the tips and information on social media can be beneficial for investors. Instagram, TikTok, LinkedIn, and Facebook are the major social media platforms that real estate investors are using and also where prospective investors should be looking for information regarding trending locations. What are the most successful investors buying? Where are they buying? All these questions can be answered on social media. Even subtle hints such as where social media personalities are traveling for trade shows and vacations can be something for investors to take note of when looking for their next investment property purchase.
There are also other platforms aside from social media that can be just as, if not more helpful. Every investor typically knows websites such as Zillow, Redfin, and Realtor.com. These sites offer statistics about new or reduced value listings, sold houses and inventory in certain areas that are hard to compete with anywhere else. When investors are trying to find the right property type to invest in, these sites have data that can point them in the right direction. Investors that are tapped into these websites and know the right metrics to identify investment hotspots can use these tools as a blueprint for success to growing a robust real estate portfolio. However, in recent years a lot of new companies like Privy and REiDeal Master have tailored their businesses to appeal strictly to investors and have been able to create platforms that can easily locates investment properties.
The last resource that every investor should be aware of to target trending locations and property types are larger brokerage firms. These firms have the money and reputation of being successful for decades not just months or years. Personalities that often grace the television screen on CNBC or MSNBC offer countless pieces of advice on all things related to the economy, real estate, inflation, and interest rates. Investors who can spend 30 minutes to an hour every day absorbing this information and tracking down these sources, where they work and what information they can provide are setting themselves up for success. While not everything these personalities say can lead to investing, these experts are often relied upon for their knowledge and foresight, so tapping into what they are saying, especially about where and what to invest in should be considered by serious real estate investors.
Find your next investment in a trending location
With these indicators and resources at their disposal, investors have no excuses when it comes to tracking down their next successful investment property. There are so many ways an investor can succeed using one or all of these strategies. Getting creative with investing and trying different formulas to achieve success is part of the entrepreneurial spirit.
