Seattle Real Estate Investing 101: Identifying A Strong Market
How Do You Plan On Investing?
You need to determine what types of properties you prefer investing in. For example, some investors prefer single family homes, as they are more familiar with that product. On the other hand, if you are more interested in safe, long-term cash flow investments like apartment buildings, multifamily or duplexes, you will want to analyze cap rates and the potential for capital gains long-term. However, regardless of the types of real estate that are more appealing, it’s important to choose an area that is vibrant with growth, a strong diversified economy that will continue to create job and population growth and drive increasing housing demands.
- Declining Markets. When you notice that the population trends and job market start to tilt downward, you might want to look for better opportunities elsewhere. Savvy real estate investors avoid declining markets like the plague.
- Stable Markets. A stable market performs just the way it sounds. It doesn’t experience any dramatic shifts in either direction. While a stable market is valuable for generating cash flow opportunities, you will want to be informed about the local market rate of growth and how it compares to the rate of inflation.
- Growth Markets. Growth markets are a Mecca for real estate investors. These are the markets where you will notice an increase in population, jobs, and a diversified, strong local economy that drives increasing demand for housing.
Signs Of A Profitable Real Estate Market
Now that you know the three main types of real estate markets. Let’s talk about the tell-tale signs that will allow you to make your first investment with confidence in the strength of the market.
- Jobs and industry: If you plan on being a buy-and-hold investor, which I highly recommend, the strength of the job market will be particularly important because you will want your tenants to have high-paying stable jobs.
- Population trends: When there is an increase in jobs, there will also be an increase in population. This means as an investor you will be in a position to profit from supply and demand of housing.
- Local legal climate: If you do plan on becoming a landlord, do your homework to make sure the local laws on important issues such as landlord/tenant laws, rental restrictions, property taxes, etc.
Need Help Building Your Real Estate Investment Portfolio In Seattle?
Investing in Seattle real estate is one of the most effective ways to diversify your investments to build long-term wealth or generate supplemental cash flow. However, even the most seasoned real estate investors know that their success often depends on the advice, negotiation skills and recommendations of an experienced local broker. It would be my pleasure to assist you in locating and securing investment properties in the most desirable areas of Seattle.