Real estate investing has long been one of the most profitable investments out there. As long as humans exist, there will be a need for places to live. As an investor, that opens up the potential for you to earn long term income. With a large number of people between the ages of 25 and 34 moving for work related reasons, a good portion of them choose to rent instead obuy, as they typically plan on moving again within a few years. Here’s a few things to keep in mind to help you find success in your commercial real estate investment.
Location, Location, Location
It really is the most important aspect of any real estate transaction. It’s important that you research the area that you’re considering an investment in before you spend the money. A quick search on the internet can give you population trends of an area, which are major factors in whether or not to invest.
You have to set personal feelings aside and invest in an area with an upward population trend. If your hometown is declining in number every year, it’s not a smart move to invest there. Find cities and areas where people are moving, find a solid property, and buy there.
Knowing the trends of the population is important, but it’s also vital that you study the economic forecast of the area. Is the unemployment rate above or below the national average? Are businesses that are in the area thriving and growing, or are they shutting down? If you are planning on buying a rental property, you need to make sure there will be residents living there that can afford the monthly rent. People only live in areas where they can work. Remember that!
This one relates pretty closely to the economic forecast, but it’s still worth looking at on its own. Inflation will always be an economic factor that you have to account for. The rent that you make on a property this year may not be enough to make it worth your time and effort 3 to 4 years down the road. Make sure the area you’re investing in has jobs that will merit potential rent increases over time.
There’s money to be made in commercial real estate investing, just remember to keep an eye on the future and the increasing trends throughout!