Whether you are looking to buy your first investment property or your 10th, the market conditions and future changes are always a concern, especially since 2007 wasn't all that long ago. Of course, from my experience those that have a lot of experience purchasing investment properties are much more relaxed about future market conditions and more open to opportunities to purchase a great money maker. Those investors seem to run on a fundamental understanding of long term real estate values. T. Harv Eker stated it best when he said "Don't wait to buy real estate, buy real estate and wait." No matter what happens to the market on a short term scale, the long term numbers always go up, and you'll get more out than you put in.
Now it's time to understand the B-List. An A-list is defined as "a real or imaginary list of the most celebrated or sought-after individuals, especially in show business." If we used that to talk about real estate, it would be talking about the top, most desired and most expensive locations to own a home. I refer to B-List locations as places which are fairly decent but less desirable and more affordable.
When it comes to real estate, obviously location is important. As an investor, you want to maximize the amount of money you invest without having to tie up your money for too long. In the stock market, you could buy top stock, but it will cost a lot and grow very slowly. The same principle can be applied to land. B-list locations are the best areas to buy land and sell within relatively few years to get the most money.
How do you identify the B-List locations? I could write a small book about this, but for now I'll oversimplify and list some factors that help to drive home values up.
- Healthy job market, plenty jobs and higher paying jobs becoming available
- New commercial retail development, new coffee shops, upscale restaurants and grocery stores, improved areas and more options to shop.
- Construction: New homes, especially single family or upscale town homes.
Consider any new developments or positive changes in a community. These contribute to increasing the area's desirability and attract more affluent residents. Ask yourself, which areas are up-and-coming?
Within the Bay Area, right now parts of Hayward are B-List locations and have been seeing increased demand, new developments and home values have climbed quite considerably. Fremont is also seeing explosive growth, but many areas are at A-List status already. Parts of Fremont and Newark have great potential though. I have also seen some great B-List areas in San Jose as well as other cities. For more information, contact me. Happy investing!
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