Do Headlines Say Invest Now and Cash Flow?
When the headlines shout best places for business, I always receive very interesting questions about articles from some very prominent sources such as Forbes, Money magazine, etc. such as The Best Places for Business and Careers. What they do not talk about for investors is all the other factors that we need to take into consideration when assessing a market.Read this article carefully: a great place for career is awesome, however, there are many factors you should consider when looking at markets for real estate investing. This information changes frequently.
There is no one (or even just a few factors) that should be considered when identifying a favored market. These reports are awesome and they accelerate our diligence. It is important to see what the reports are highlighting. Great place to do business is absolutely paramount and you want to see that it has housing qualities as well.
Below is just some of the diligence we look for in markets. We can never get 100% of everything we want in one market so we take the best of the best.
- Affordability index
- permit activity
- Absorption rates
- Rehab activity
- Consumer confidence
- Home sales activity
- Market time of listings
- Pending home sales
- Inventory levels
- Job growth
- Rental activity and rates
- Property taxes
- Supply and demand
- Housing expense versus income
Out of the highlighted markets, the markets with the most favorable aspects are the markets with smaller populations. It is the small population that may impose a risk if the low job diversity should falter. The bigger cities look to have good merit, the stats are not quite as impressive but the security of jobs diversity more favorable.
It is easy to see why they made the list. Do they make the best place to invest in real estate list???
Comes close and this is when we keep an eye on them and continue the diligence deeper. Again the more favorable each of the aspects above the better off the investor may be.