How to Spot a Good Real Estate Investment Opportunity

By: Kris Koonar

Real estate investment is one of the best ways to make substantial profits in a short time. According to the Forbes magazine, it has given the best returns to prudent investors as compared to other businesses. America is a land of equal opportunity and home to a continuous flow of a large number of immigrants. This has given rise to an ever-increasing need for housing and has boosted the demand for real estate.

However, there are divergent views with many people believing that the boom in real estate is over and the housing bubble may burst any time. Regardless of what the future may hold in store in the long run there are ways and indicators to identify a good real estate investment opportunity that will allow you to reap quick bumper returns on your investment. Let us look at some of these.

The first way is to locate a place that has a trend of migration. There are certain areas that favor cross border or inter state migration, which makes them potential locations for an increasing demand for real estate. A little research and some time spent in examining maps of nearby locations can give hints on place(s) with an existing trend of migration. Usually these are places where industrial development is taking place.

When new manufacturing facilities come up in areas at the far end of a town, with good road connectivity and utility access, then this spells an opportunity for a real estate investment that is sure to go up price wise. The rate of the rise in price will however depend on the type of migrants as different type of people like to stay in different locations and homes.

When the idea is to invest for getting rental income, university towns are ideal. These places have a constant inflow of national and international students needing accommodation that is near to the university campus during their scholastic tenure. They pay good rental, making the average rental yield higher than usual. In these places, you get a steady stream of potential tenants.

The real trick in spotting a good real estate opportunity is the ability to foresee profits where others see only problems. You should be able to evaluate a potential property by thinking out of the box with all possibilities in mind. Do not think about homes that are in a good condition if you really want to make a good profit. Good homes lack the potential to give you good profits because they are in high demand and come at higher prices hugely reducing the profit potential. Look for a house that no one else wants that you can renovate and later resell or put up for rental income if the location is right.

Take out time to scout the area you decide to invest in and find out all the relevant details such as the prices at which houses sell and the schools, shopping and recreational areas etc. When you are in possession of this knowledge, it will let you quickly spot an investment opportunity when it comes along.

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