The
set of articles should act as a guideline for current and future real estate
investors and it will explain some basic fundamentals to follow, that no real
estate agent explain you about.
Local economic factors:
Local and national indicators cooperate together, however they occur
within different time frame and impact on investment.
Job Growth – can be defined as
economic growth by sector. To satisfy aggregated demand companies expand their production
lines therefore new work places are created to cope with increased demand. It
appears on economic boom cycle with rising inflation.
Migration – flow of human
capital from out or into the county due to economical, political or social
reasons. Migration from the country may be related to economic slowdown,
political instability, warfare or natural disasters, where migration into the
country can be stipulated due to economical growth ( where people move freely)
due to natural disasters or warfare (
where people are forced to migrate). When we talk about economic migration,
work force is attracted by more advanced living conditions (social, financial),
however it may be restricted entry for certain nationalities.
Path of Progress –
is
closely related to economic growth
of selected investment region. In a scenario where well known brands are moving
into the area, new transportation links are established or major improvements
are on the way to economic wellbeing- these are the signs to look and follow
towards lucrative investments. To purchased properties in early economic
progress area is investors dream as rewards for purchasing and holding may
exceed even most optimistic expectations.
New Construction –
occurs
due to economic growth of the region.
Local and National factors form scope, location and capacity of new
construction. To build a new building it is lengthy process and may take number
of years, therefore having that in mind it is essential to follow planning
permissions approved and new construction commencements in the area. This will
allow understanding the supply of real estate stock and determining your
investment strategy, now and for the next 2-3 years. Future demand cannot be
ignored by any means, as commercial space purchased off plan now, may be off
demand when building is completed, this scenario will lead your property to
increased area competition and lower rent yields.
Success in real
estate investing is based on data accessibility; your knowledge how to
interpret this data and investment aims. For more diversity and security use
modern portfolio strategies, never neglect due diligence and do not fall in
“love” with properties.
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