Hot Markets For Real Estate Investors

Real estate investors are usually looking for the hottest markets. Where can they purchase, and what can be purchased, that will make them though most money? It's not that difficult to discover as long as you are willing and able to do away with the generic speech and figure out what constitutes a “hot market.”

According to Ken McElroy, author of “The ABCs of Real Estate Investing”, a hot market is something that has a high demand but a short supply. For example, if there is a plot of land on the riverfront that seems undesirable, but is capable of being, that may turn out to be a piece of hot property. Often, even experienced people will be unable to distinguish what is in front of their own eyes. If an investment property is deteriorated, for instance, or needs a facelift, it may not up here to be a good deal to someone who is not paying attention. But the very fact that it is on the water, a place where people want to be, may make it worth having.

Another type of hot property, according to McElroy, is a property with personality. He refers to the Venice Beach area in California, which was featured in a movie called “Lords of Dogtown”. This is a tough, edgy spot full of skateboarders and surfers. It's “hip”, and the fact that a person lives there says to the world that they are funky, tough and artistic. If you can buy a piece of property in that area, there is instant interest, simply by reason of the “cool” factor.

Not all locations have persona, however. But they may have other things, like existing industry, or a big box retailer on the way. Big companies bring jobs and jobs bring more people, who need places to live. If people are moving in from another city, they are most likely feeling pretty positive-minded, looking forward to a new life in a new city with a shiny new job. Their optimism can work in the investor’s favor.

Military bases are great population draws as well, and not all military people live on base, as McElroy. points out. He also cautions, however, that real estate investors should be careful when counting on military bases, as government budget cuts can sometimes mean the closing of these bases.

Plain old visibility can also qualify a property as a “hot property”, or at least up it’s “hotness” factor if it is in fact a advantageous place to live. Lots of drive-by traffic can be a good thing. Drive-by traffic is free advertising. It also means that there are already plenty of people around the property, and probably that the rental unit(s) is on the way to work for a lot of commuters. Maybe it would be a closer trip for some people, which is a helpful thing.

What it comes down to then, is that a hot market is property where people are. If the area has a large population, or is expecting an increase in it’s population, that means their’s a good economy, and a good economy is what will support your real estate investment business.

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