Is It All About Numbers or is it About Emerging Markets?
By: Mary Stewart
Keller Williams-Jacksonville, Florida
Is it ALL about the numbers? For an investor, numbers are only the starting point in evaluating a property.
If the numbers work and the ratios are right, you are off to a great start. However, there are other factors that must be considered in choosing a great investment property.
Recently, I read The New Rules of Real Estate, by Spence Rascoff and Stan Humphries, and they referenced additional information that should be considered.
They noted the old familiar maxim, “Location, Location, Locations” is partially true but, more accurately, should be stated “Future Location, Future Location, Future Location”. The changes that take place around a home will define the value, whether you choose to live in it or buy it as an investment.
Change follows predictable patterns that need to be understood before making an investment in real estate. A neighborhood should be viewed, not for what it currently is, but for what it’s on track to becoming.
Sometimes, the best strategy is to buy a home in the neighborhood that is up and coming. Good indications of emerging neighborhoods are:
- Revitalization in neighborhoods with a lot of old homes being remodeled and restored.
- The “Starbucks Syndrome” - homes within a fourth of a mile are worth more. A Starbucks arriving in the neighborhood is a good indication of change and an emerging market.
- New hardware store coming to an area.
- Walkability factor
- Infrastructure (sidewalks, street lights, green spaces, etc)
- Great Schools
- Curb appeal potential - An unattractive house that requires major exterior work in order to create curb appeal may not be the best investment. If curb appeal can be increased with a little landscaping, paint, and perhaps a new front door, that may be a great deal.
Do you know of any other great indicators that would be helpful to others?