Talk to local experts
The old adage that real estate is location, location, location applies here. By seeking out the local experts who understand the area, investors gain knowledge unavailable online or in publications. Attending local networking and local market update events can yield the right connections.
Use reports to gauge the broad scope
The nationwide market matters, so analyze the right data to understand where things stand. The U.S. Census Bureau report on construction spending details both residential and nonresidential activity, while The National Association of Realtors report shows home sales and rental volume. By knowing these levels, investors are able to judge when a slowdown or ramp up is beginning.
Look at the drivers of real estate markets
Once trends began, it’s difficult to adjust because real estate projects have long life cycles. By analyzing the drivers of the market, investors can gain insight into the long term. Reports on employment, permit applications, loan applications, demographic shifts, and migration all open a window into the future.
Watch for population growth
Whatever the broader market trends, areas with population growth will return solid ROI. By monitoring growth in cities and corporate relocations, investors can gauge where their money will increase the most. Also, get information on specific zip codes. If an employer is coming to town, that means population growth.
Learn from brokers
Brokers are in the thick of things. They know what trends are coming. Be sure to connect with them. To make big profits, knowing what’s happening before a trend takes hold makes all the difference.
Landlords should track days to rent and flippers should track days to sell. When these trends are monitored over time, the investor sees trends evolving.
In addition to tracking data and local networking, it’s also crucial to know your strategy and stick with it. There are always fluctuations. If the strategy remains solid, investors profit over time.