With the unrest in Washington about reform or taxes, we don’t really know what’s going to happen. I don’t spend time watching the news or listening to people who don’t have experience in what they are talking about. Based on my experience investing and living in several different markets over the last ten years, I focus on three criteria before investing in any market.
- Infrastructure Spending – Go to a town planning meeting or drive around the market to see if construction road expansion, bridge improvement, and new streetlights are increasing. If your market has increased spending, it’s a good sign because it likely leads to criteria two.
- Population Growth – Read local newspapers or google population stats for the market to see if more people are moving in versus out. Pro tip: go to a local coffee shop and listen for locals to complain about new people moving to town causing worse traffic than there already is on the roads that are always under construction (likely happens within 15 minutes of entering). If the population is increasing then a good market will be supported by criteria three.
- Job Growth – Similar due diligence for population growth should be done to determine if new companies are moving to town and businesses are adding hundreds or thousands of jobs. If you find a market with positive indicators for those three criteria then you should be in good shape with your real estate investments. Always run your numbers correctly, conservatively, and buy for cash flow plus the ability to increase property income to create your own appreciation (don’t buy and hope for appreciation).