Real Estate Investors – Be On the Look Out For Appealing Opportunities

fotovoyager-city-viewYou might be hearing people say there’s a lot of opportunities in today’s market. But, what does that mean? And what does an appealing opportunity look like exactly? Here’s a quick list to help you spot some potential opportunities for investment areas:

Government Plans—New rules and regulations can create or kill opportunities (see Julie’s article on Rent Control). A ban on development in one area will impact other areas where development can take place. It’s difficult to say exactly what you have to watch out for, but read the local news and get a handle on what the local government is doing and any legislation changes that are in the works that will impact you as a property owner. I previously discussed another example of government legislation that could impact you – landlord licenses!

Interest Rates—The higher the interest rates, the lower the prices typically because debt becomes so much more expensive. This is not the case currently as central banks are desperately trying to kickstart faltering economies—we have the unusual situation of low interest rates and lower prices. But having an understanding of what interest rates are doing and how they impact investments in your area is important.

New Development—We were burned by buying a condo in an area that was about to explode with similar sized condos. A little research would have told us that the area was about to be flooded with similar units to what we were buying. An area that has been flooded but has good indicators otherwise could be a good opportunity – if you buy AFTER the flood has hit the market.

If there is something preventing new development in an area that is actually a positive thing in most cases. It often means existing properties will go up in value. But, it can also mean that area will just die off and lose out to the newer more interesting areas being developed. Learning about the area will give you a good indication of what is happening. If businesses and governments are investing in that area despite a lack of new development it’s a very good sign.

Availability of Land—Very related to new development, but important to look at as you try to spot opportunities. If there’s plenty of land and empty lots around and there are no limits on development then it’s likely that supply will continue to grow to meet demand. And, keep in mind, a small parcel of land can turn into a multi-unit complex that will house dozens of families so just because there is only one or two good pieces of land in an area doesn’t mean there won’t be any large developments. But, it’s still a factor to consider.

None of these elements guarantee that you’ve found an area that will flourish in the future – but in combination with other strong market fundamentals – finding appealing opportunities like a shortage of land or good government support of rentals will definitely have a positive impact on your investments!

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2 Comments

Filed under investing, real estate

2 responses to “Real Estate Investors – Be On the Look Out For Appealing Opportunities

  1. A great (and much appreciated) look at real-estate buying.

    It’s interesting how some people react to the recession; it’s like the phrase “buy low, sell high” never existed. Now is a good time to buy or move horizontally; you just have to be smart about it – and with this post, that’s a little easier.

    P.S. NetChick sent. A pleasure being here. 🙂

  2. @ Jeremy,

    Thanks for your comments and for stopping by! Yes, it’s funny how “real estate” is now in everyone’s bad books all of a sudden. But, if you buy as an investor for long-term holds, buy with cashflow and location as your primary drivers (not speculating quick appreciation), you will do very well in real estate. Now more than ever! Up until mid-2008, the last few years have been crazy. When the media is telling you to buy – you know it’s too late! We are very excited about all the opportunities right now. Hope you find a great investment property!

    Julie

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