5 Ways to Win the Real Estate Investing Game
Many people believe that because I grew up in the cold state of Minnesota, that I am a hockey fan. While I may not necessarily be a hockey fan, I do resonate with perhaps one of the best hockey players of all times, Wayne Gretzky. Wayne says he wins his games because of his different playing strategy. He says. “While most players skate to where the puck is, I skate to where the puck is going”.
How to win in the real estate game
I absolutely love that statement since it applies as much to the real estate game as it does to playing hockey. Wayne understands the hockey puck is a moving target, and to excel at controlling the puck you need to anticipate where it is going.
This philosophy is paramount for real estate investors to understand. Like the hockey puck, best real estate investing markets are always moving. The difference is you cannot visually see the move, making it harder to stay ahead of the real estate game. Most people rely on listening and learning what others are doing. Once they determine where everyone else is investing and where the best real estate investing markets are, guess what? Correct! The market has moved already.
So essentially most investors are doing as most hockey players are doing, they are skating to where the hockey puck is.
By the time they get there the hockey puck has moved, as did the best real estate investing markets. Obviously the speeds of moving markets versus the speeds of hockey pucks are much different, the fact you cannot physically see the moving market creates intriguing comparable comparison.
Watching the invisible moving real estate markets
Knowing what to look for and watching the trends in best investing emerging markets is your visual aid (like seeing the puck!)
Look for markets with growing businesses that create new jobs.
Markets like Detroit (The Motor City) had lots of jobs but they were all related to one industry, when the auto industry left, the economy of motor city was devastated. Similarly was Las Vegas during the recession. It was hit hard as the lion’s share of the economy was driven from the gaming industry. When people could not afford to go do their gaming, the city suffered massive losses. So an emerging market should indeed have a number of industries fueling the economy. This way if one industry should falter the market can still move forward.
where there is job growth, population growth typically follows. It is important to insure your investing market has a growing population since this increases demand for housing which we all know grows home values.
A number of markets may fit the top three categories, but for a market to be a sustainable investing market it is important that the market be undervalued. This essentially means that home prices should be less in this market than the national average (the ability to buy a median price home for 3 times that of a median income).
For an investing market, home prices should allow you to buy a median priced home for less than 3 full years income.
City vision plans:
To help insure sustainable growth to a market, I always like to look to markets that have a growth plan. Commonly known as a city’s 5 or 10 and sometimes a 20 year vision plan. When a city has a plan to continue to attract businesses and properly executes that plan, you have a nice sustainable market.
With these 5 insights as your guide, you now know where your real estate investing market (your hockey puck) is going and you to can be a winner. Just as Wayne Gretzky skates to where the puck is heading you now can invest where the best emerging market trends are heading.