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3 Important Factors in a Successful Apartment Deal

Population Growth: Whether you are investing in a primary, secondary, or tertiary market it is vital for you to invest in a location with a growing population. This is because real estate investing is a long-term game. Properties are held for years at a time so to help mitigate your risk you will want to invest in an area that has a perpetual influx of people. When people are flooding into a specific location, they will obviously need a place to live. Again, this is great for investors because it will help keep occupancy levels up and allow your property to flourish. Employment & Economic Diversity: A location with major employers will most likely result in a steady influx of people to that area. That is why analyzing the employers in the location that you are looking to buy in is so important. Having credible, rock-solid companies in the area will help drive people to that location. This brings me to my next point; when you are performing your due diligence on the employers in the area it is important to look at two more things. First, is the location desirable enough that new companies could potentially move their business to that area? If so, then this could be super great news! This will help drive even more potential tenants into the area. Second, you should be looking at the diversity of the businesses and the economy of the area. Let’s say that you live in an area where there is one big manufacturing employer and they employ 50% of people that live in the area. This may be a red flag. What if this employer leaves the area or what if manufacturing takes a dive resulting in major layoffs? That’s why it is important to look for locations with a wide range of employers across many sectors. This can serve as a hedge against a large amount of people leaving if a company moves locations or if a recession hits, resulting in downsizing. Location: You have heard this one before and you will continue to hear it because it is so important. Location is one of the key components to nail down when looking at which deal to choose. A very desirable location is a combination of what was previously mentioned above. This means that you have found a highly demanded area with a growing population and an array of different businesses. Now, it is also important to analyze the location at a micro level. This means you must look at where the property sits and observe its surroundings. Does your property sit next to a highway or an airport? If so, will that cause a lot of noise in the units, disrupting the tenants? Does your property sit next to a single-family home that is horribly taken care of and is a huge eye sore? If so, this could deter potential tenants from stopping by the property to get a tour. The list goes on and on, but at the end of the day it is crucial to make sure that you know the location both at a macro and micro level.

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