Real Estate Investment: How to Spot the Next Booming Neighborhoods
Investing in the real estate is much like investing in the stock market - no one really knows when the market will rise or when it will crash. In the case of real estate investment, investors are often on the lookout for houses in neighborhoods that are likely to boom or gentrify within the next five or 10 years. How do you spot the next booming neighborhoods in the country?
As previously reported here on Realty Today, buyers and investors may be interested to purchase a home in the 10 booming towns in the U.S. These include: Power Ranch, Gilbert, AZ; Historic Cultural Center, Los Angeles, LA; Downtown, Dallas, TX; Downtown, Miami, FL; and Mountain's Edge, Las Vegas, NV.
The aforementioned towns experienced a high percentage of growth over a period of five years. These towns also had employment opportunities and new home construction to tend to the demands of the society and market.
In terms of investment, however, investors are often on the lookout for areas, which are just about to boom or gentrify. Realtor.com notes that while there is no surefire way to determine which neighborhoods will gentrify in the next couple of years, there are signs to look out for.
The first thing you need to look into is location. Most investors are already aware that location greatly determines the house value; therefore, investors are always looking at areas around richer neighborhoods.
For example, a ZIP code in Bed-Stuy, which is around Brooklyn, NY, experienced a 194 percent appreciation in the price of single-family homes from 2004 to 2015. Buyers and investors should, therefore, be on the lookout for areas next to in-demand cities with a housing shortage.
Buyers should then take note whether the area has the presence of good school systems and whether there has been an increase in the price of parking spots in the area. The rise in the price of parking spots signals that there are more residents of means are moving into the area.