I hope that I stressed sufficiently in my recent post about How much capital do you need to start real-estate investing? that my “purchase in the median-to-just-below” price range recommendation is based on single family homes/condos/apartments.
Barbara Corcoran, who I consider to be the USA ‘expert’ in this area (although, the particular advice in my previous article did not come from her) said that you should also look:
1. For an area where rents are rising fast (7% year-over-year rent increase generally means a hefty property price increase is soon to follow),
2. You should take a walk around at night and look for ‘young activity’ in coffee shops, cinemas, whatever
Peter Spann (the Australian version of Barbara Corcoran, although both would dispute that particular comparison on more levels than one) would add:
3. Look for a neighborhood NEXT to a neighborhood that has spiked in values … that will generally be the next one to go up,
And, Dave Lindahl in his book about finding emerging markets has a very comprehensive way for identifying the next hot areas (for multi-family housing in particular, but I see no reason why it wouldn’t work just as well for single family) for those who like doing a little web-based data research.
Of course, if you are pessimist, the market is still overpriced and you will sit on the sidelines until we are late into the next boom, but if you are an optimist (realist?) …
… happy bargain hunting!
Great post! Thanks for the links and the how-to!!
Why is this necessary? What information does this provide for us looking for Real Estate? (2. You should take a walk around at night and look for ‘young activity’ in coffee shops, cinemas, whatever)
@ Steve – You’ll have to ask Barbara Corcoran 🙂 But, I imagine it means that an area that has that sort of activity is ‘up and coming’ …
… I also have a friend who wants to start a Private Equity Fund that will buy into ‘artist colonies’ and hold for 10 years; research has shown that where artists live / work today is the ‘hot area’ of the next decade.