Knowing Your Location, Real Estate Investment

Location is the most important thing when it comes to real estate, at least that’s what everyone says. And I agree. But to me, locations have to be evaluated not based on geography alone, but based on how they measure up in relation to supply and demand. After a location has met the criterion of being in an area with good employment prospects and a growing population, I look for a few important physical features that experience has shown to be valuable: Great locations have drive-by visibility. The more cars that pass by your property and see your "For Rent" sign, the better your chances of success. Drive-bys are one of the most effective forms of advertising and certainly one of the most cost-efficient. When your property is on a street with no traffic, you’ll have to resort to more expensive and less effective methods of advertising. This almost inevitably reduces your profitability because lower occupancy means lower cash flow. Take another look at these three characteristics of great locations and what you find is that they add up to one simple truth: Great locations are low in supply and high in demand. This is at the heart of your market evaluation. Be realistic with your analysis and look at the future of the market with a keen eye on the present. Property investing should pay off now and later. The first step in buying right is knowing your market better than anyone else.