Many real estate investors will notice potential red flags indicating a bad investment. Some of these include long time on the market, decreasing asking prices, and high turnover in the neighborhood. Noticing red flags might be easy, but what are some of the green flags of a smart real estate investment? Here’s a list of 13 signals an investment may be a good one, according to a panel of Forbes Real Estate Council members. It would we wise to not overlook these signs of a smart real estate investment when looking for your next deal.
1. It’s Located Near A Big Tech Company HQ
“The people working for big tech companies like Google, Amazon and Facebook are pretty safe, employment wise. They will be here a while, unlike certain motor companies that do not innovate or outsource. Those tech employees need to eat, play and sleep. By buying properties in the areas these employees work, you will be in a great place to cash in off their success and longevity.”
2. The Neighborhood Is Walkable
Walkability combines factors like metro/transit access, bus stops, retail/shopping and parks. If the neighborhood has a high walkability score it is a winner.
3. It’s In Close Proximity To A Hot Market
When a neighborhood becomes in demand, prices will increase and some people will move towards to the outer lying areas. Getting into these areas early is the secret to a smart real estate investment.
4. The School Systems Are Highly Rated
School systems will influence the value of a home. A home that would otherwise seem outdated and not in great condition can turn into a good investment because of location.
5. It’s Near A Body Of Water
Water is one of the most desirable real estate features. Real estate firms should highlight this unique attribute.
6. There Are Lots Of In-Progress Commercial Projects
“It’s easy to love a neighborhood with a long track record of stable home values. But really savvy buyers can see into the future. Buying into neighborhoods that have as-yet-uncompleted commercial projects (such as renovations to shopping malls, or an “in the works” football stadium) equals green flag. We know the area will gain attention in the near term and desirability and value will go up. – Courtney Poulos, ACME Real Estate”
7. There’s Been Steady Market Appreciation In The Area
A good “green flag” which means you are buying into a good neighborhood is its past. Steady and consistent market appreciation could indicate a good opportunity.
8. Local Retail Sales Are Soaring
“While demographics are the most commonly observed measures for development, household income and density do not always tell the full story. Strong sales for surrounding retailers can give confidence to tenants, and therefore developers, to overlook the other indicators.”
9. Popular Business Franchises Start Moving In
Most major corporations have real estate divisions that study locations to build new stores. You can let their research work for you. For Class B, look for areas that are building new McDonalds, Walmarts etc.. For Class A, look for Whole Foods, Starbucks and such. These are sure signs of a popular area.
10. There Are Signs Of New Growth
While driving through a neighborhood, if you see signs of renovation or new construction this is a good sign.
11. It’s Located Near Major Transportation
If you see big dollars being spent on roads, that is a green flag to invest. Surrounding areas will go up in value as well.
12. Prominent Neighborhood Structures Are Being Rehabilitated
Rehabilitations of prominent structures such as fire stations, empty commercial property, or similar civic structures can point to future commercial construction.
13. Residential And Road Expansions Are Happening
When residential construction starts popping up and roads are expanding, this is a definite sign of future growth. This is the time to buy land around the area for a smart real estate investment.
Read the full article at Forbes
Kara L. Stachel, Esq. is an experienced Fort Lauderdale real estate attorney. Ms. Stachel is admitted to the Florida Bar and the New Jersey Bar, and is a member of the Florida Bar Journal’s Editorial Board, American Bar Association, Commercial Real Estate Women Network, and Real Property, Probate and Trust Law Section of the Florida Bar.
Stachel Law’s real estate clients include lenders, brokers, investors, consumers, sellers, and real estate agents, all of whom are counseled and represented throughout every step of a legal matter. The firm provides clients with extensive experience in complex real estate transactions and litigation.