With the right research, real estate investing can be an exceedingly predictable and healthy income stream for investors. Understanding how location statistics affect your investment strategy is crucial to its success.
Here are some real estate markets investors should target and why.
Summers are not the only thing that’s hot in the Valley of the Sun. With an average annual home appreciation rate of 8.23%, the Phoenix real estate market is scorching. Experts speculate this is the result of recent population and job growth. From 2010 to 2018 alone, Phoenix’s population grew by 15.9%. Furthermore, since 2015, Arizona has added more than 350,000 new private sector jobs. And despite the recent economic crisis, Arizona leaders are still pushing for growth.
“We have no intention of slowing down,” says Arizona Governor Doug Ducey. “Our focus will continue to be on cutting red tape and eliminating unnecessary regulations, while empowering people to get to work. My thanks to all our partners in the legislature who have helped make Arizona competitive for people and businesses, and all the entrepreneurs and employees around the state working hard to grow our economy.”
A little less than a two-hour drive from Phoenix, the City of Tucson has seen exponential population growth, thanks in part to the city’s low cost of living and a diverse economy centered on manufacturing, banking and higher-level education. With its proximity to Mexico, Tucson’s economy has also benefited from international trade and tax-advantaged maquiladoras—manufacturing plants that import and assemble duty-free components for export.
With home values nearly doubling since 2010, the City of Austin has been on an upward trajectory for the past decade. In the last two years alone, the city has become a technology hub, bringing high-paying jobs to the area.
Financial experts anticipate Austin’s job and population growth to remain steady, even with the pandemic. With auction homes now making up 78.6% of distressed inventory, investors should consider attending an auction in order to obtain property for less than true market value.
Since the Great Recession, Albuquerque’s real estate market has centered on flipping houses. But since the pandemic, Albuquerque investors have begun to shift their focus to rental properties. While buying tends to be more affordable than renting in Albuquerque, new listings have decreased by 0.8% for single-family homes, creating heightened demand for rental properties.
Las Vegas, nev.
Currently one of the hottest real estate markets, Las Vegas is experiencing population growth at over 2.5% and is in high demand for rental property. Because the job market mostly consists of low-paying hospitality jobs with high turnover, many residents rely on affordable rentals.
With low property taxes and heavy reliance on tourists to generate sales tax, Las Vegas is an ideal city for real estate investors. Even during the pandemic, the city’s constantly booming tourism industry offers peace of mind for property owners.
Compared to the previous year, Dallas has seen home prices increase by 20.7%. The city’s median home price has also grown by 15.3%. For investors, these statistics are promising signs of economic growth.
Even among economic turmoil, the city has managed to thrive. In fact, the city’s unemployment rate fell to 6.6% in August 2020. This number is significantly lower than the country’s average 10.2% unemployment rate.
San Antonio, Texas
As the second largest city in Texas, San Antonio has a stable and diverse economy focused on technology and cybersecurity.
Low home prices make San Antonio an attractive market for investors. And home buyers appreciate the affordability —it’s not unusual to find newly constructed homes in the $200,000s. While property isn’t very expensive, investors can expect high rental rates as a result of an exponentially increasing population.
Ready to invest yet?
With so many great locations to consider for real estate investing, it can be difficult to decide on just one. It’s good practice to exercise extreme patience and caution when narrowing down your options, making sure to pay attention to market forecasts and previous trends.
If you have questions, or want to learn more, contact Caliber here.