Of all those that dive into real estate investing, only a small percentage come out the other end with their desired result. Successful investing takes time, skill, knowledge, and discipline to stick with it when things don’t go your way. You have to know where to look for deals, what a good deal looks like, and where the best markets for real estate investing are.
While a savvy real estate investor can be successful in any market, some areas are better suited for certain investors. One way or another, the real estate market has to be right for an investor. For example, if you’re a new investor with little experience, jumping into a multi-million dollar deal might not be a great idea. That doesn’t mean those deals aren’t right for someone else though. Here are some of the things you should look out for.
The one thing all the best markets for real estate investing have in common
What do the most successful real estate investors have in common? They know their market. That’s why the best place to start your search for real estate investment opportunities is in your own back yard. There is no place you’ll understand better than your town and neighboring towns. With a better understanding of what houses cost in the area, you can better understand what you can get in that market on a fixer-upper.
Simply put, the best markets for real estate investing are the ones you understand. Going into a market completely blind is dangerous. Do whatever research you need to do. Understand properties in the area that are similar to the one you’re considering.
Be aware, too, that different markets can lend themselves to different real estate strategies. Are there a lot of renters in your market? Perhaps a buy and hold strategy would be good. Are you in a higher value area with properties that need improvements? You may be able to flip a home for a high profit. Neighborhoods, towns, and cities with a high turnover in housing could be advantageous for wholesale offers. Just be sure you understand the laws in your state as wholesaling is not always legal.
Considerations for the best markets for real estate investing
The most important consideration for your real estate investing strategy is how you are approaching the market. What are you looking to do? Flip? Buy and hold?
Either way, go into any deal with an escape strategy. Investment deals can hit your pockets hard when they go wrong and, if you’re new to investing, you might have a hard time absorbing the blow. Having an exit strategy is important for two reasons:
- You know your way out.
- It means you’re not stuck.
Being stuck with a home can be a huge burden. If you can’t sell it on the market, you’re stuck paying taxes on a property you no longer want anything to do with. Having a network of other real estate investors in your corner can be extremely valuable. They can guide you to best practices and even be potential buyers if you get in over your head.
What type of investing are you planning to do? What is the range of property values in your market?