Real estate investing is about the intuitions and the emotions of an investor as much as it is about his goals and objectives. Investors are guided by statistics that help them in taking investment related decisions. They know which housing markets to avoid and which type of properties will bring in decent return on investment. However, there are many underlying statistics behind the more obvious ones that all real estate investors should be aware of.
Places considered desirable to live
One of the easiest methods of knowing the places where people want to live is to look at the rate of growth of population in different cities. Here it is important to prefer areas where this growth rate is sustained in comparison to places where the population grows in spurts. Population grew in Texas also because of oil fields but real estate investors did not benefit because of it. This happened because economic growth there was not sustainable. You will see demand for rental homes going up in cities where economic growth is taking place. There is high demand for apartments in these cities. One exception is California where you see communities especially being developed for retirees.
Another statistic having great significance for real estate investors is increasing interest rate. If economic growth is taking place in an area but interest rates are also growing at a steady pace, demand for homes will still be high but homes will be less affordable for buyers. It is important for you as an investor to see that monthly rents and equated monthly installments are not very steep as they can make homes unaffordable for buyers. In general, rents and mortgage repayments should not be more than 30% of the monthly income of the household in an area.
Do not equate population growth with economic growth as a rule. Population of a place may have increased considerably because of annexation of its suburbs and not because of favorable economic conditions.
Another statistic important for real estate investors is unemployment rate of the area. However, it does not reliable as high unemployment rate only tells the investor how many people are looking for jobs. However, you never know how many people were absorbed in the workforce by learning about unemployment rate in an area.
Real estate investors have catered to the whims, desires, and requirements of baby boomers for a very long time. However, it is time to pay attention to what Millennials are looking for in the real estate market. Statistics reveals that as a demographic, Millennials are accounting for nearly 33% of the home sales in all major housing markets of the country. It is expected that by 2025, Millennials will constitute around 20 million households across the country.
You are missing the bus if you are not using technology
Digital revolution has already taken place and you are out of sync if your investment strategies are not making the most of latest technical tools. For example, properties sell 68% faster with the help of photos taken through drones. More than 90% of all buyers today start their house hunt on internet before they contact a real estate agent. If you are an agent, the most important part of your website is About Us Page. Potential clients love to know about you as a person before hiring you as their agent. Do not ignore this fact and make sure that your About Us page does all the talking to your prospective clients.
These are some statistics that you really need to pay attention to if you want to improve your chances of success in the world of real estate investing.