Don’t Speculate on Investment Property, Invest In It

Quick,what’s the economic forecast for the region surrounding your “investment property”?

Do you know?

If you do and that’s why you bought in that area great, if you don’t it’s not an investment, it’s a long shot.

Without understanding the basics of what is going on in the area you are leaving yourself wide open and this is something an educated Real Estate investor would never do. By understanding what drives the market and the long term viability you can ensure your investment becomes successful.

So here’s a quick primer. If your investment area is dependent on one driving force, what is the long term forecast for that force?

As an example, you can buy a house in Detroit for almost nothing, the driving force in the area has been auto manufacturing and the prognosis for the near future simply isn’t that good.

So neither is the housing market and buying there is a long shot. Long shots aren’t a sound investment strategy.

On the other end of the scale is an area like Dallas, which is heavy on energy related industries, but also has aerospace, electronics and pharmaceutical industries to help carry it along.

This has created a strong job market, which attracts workers which further helps grow the economy locally which leads to good long term investment opportunities in that Real Estate market.

When you are committing serious amounts of cash into an investment, you need to do your homework. Lot’s and lots of homework!

If it’s going to be truly an investment, why wouldn’t you want it to be successful and success begins with understanding the local economy. That’s what will separates an investment property and a professional landlord from a speculator and a speculative investment.