It is time to stop speculating and start investing. You all know that Real Estate storehouses are a major portion of the countries wealth. Here in the US, building permits, pending home sales, unemployment, affordability indexes, job diversification, baby boomer attraction, job growth, home sales etc, etc, are all leading economic indicators.
Being in the information age, there is more information on economic indicators than ever before, so isn’t it interesting that most people make their investment decisions on appreciation, cash flow and cap rates. These 3 factors are paramount to a great investment, However the Warren Buffet and Donald Trumps of the world knows that it is Location of these cash flows and cap rates that depict the long-term returns that these investments will provide.
Case in point: you can acquire a 10+ percent cap rate in most cities in the country that will give you a $100+ per door cash flow. This is where most people stop there evaluations. What if market A has a 6.5% unemployment rate and Market B has a 12.5% unemployment rate? What if market A Has a 10% higher affordability index than Market B. The list goes on and on.
There are Billions and Billions being invested every month on Real Estate and yet very little diligence is being done to evaluate the profile and longevity of the investments. (This is the very mistake that many so called investors made over the past 5 to 7 years)
Do yourself a favor and subscribe to as many blogs and newsletters as possible to stay in touch with economics of real Estate investing.