If you’re a real estate investor, you likely keep a pulse on neighborhood trends in your area. If you predict the next hot neighborhood, you could make some serious returns.
But what are the patterns you should keep an eye on as investors? Here are some of the best predictors that an area may soon have great real estate investing opportunities.
1. Renovation Projects
The presence of major renovation projects in a community is a leading indicator that a neighborhood is on the rise.
If you see that previously neglected buildings, streets and outdoor spaces are undergoing major fixes, property values will likely soon rise. To get an even earlier jump, go to town meetings to find out about upcoming projects.
If homeowners are renovating their houses, this is a sign that the community is invested in their community.
2. Trendy Establishments
The arrival of new businesses, especially trendy ones, is another good sign. Watch out for restaurants, coffee shops, bars, clubs, art galleries and other entertainment-based or cultural establishments. New, innovative kinds of establishments such as urban gardening spaces and shared office spaces are useful indications too.
When these businesses start popping up, it means that their owners believe that there are customers in the area. These attractions might start bringing more people into the neighborhood, in turn enticing more residents and businesses into the region.
3. New Jobs
When a new large employer moves into a city, they will likely attract more job-seeking residents. In the neighborhoods where these businesses are located, coffee shops, restaurants, and other establishments may start appearing to serve the new employees.
A new employer in a city also means that people will likely move into the surrounding neighborhoods. Areas with easy access to the business’ locations via public transportation or other means could be prime spots for residential real estate.
4. Rising Local Prices
In on-the-rise neighborhoods, prices often rise as well. If prices on everyday commodities like food and coffee have gone up in recent years, it could be a sign that demand is high. That means there are a lot of people there. The high profit margins will also likely attract more companies looking for somewhere to start up or expand.
5. Young People
If young people are moving to a neighborhood in large numbers, it could mean the spot in on the rise. Young people who are just starting out in their careers often can’t afford more established areas, so they head to lesser known ones. Once they’re there, though, they can make that area into something noteworthy.
Bars, restaurants and other businesses often move into the area to serve the young new residents, further boosting its popularity.
6. More Dogs
Interestingly, you may be able to predict the popularity of neighborhoods based on the number and breed of dogs living there, according to a New York Times report.
The report looked at dog license registrations and neighborhood boundaries. It found that when the amount of “designer” dogs in a community increases, real estate prices may soon surge too.