In this episode of Get Real Wealthy Season 2, Quentin talks about six numbers that you should look at when you’re deciding to invest in a new area.
Quentin says that it is important to look at this specific information so that you can evaluate its potential for investing and the value of the properties in the future. The first thing to look at is demographics. Look at the age of the population, are they working in the area or are they commuting to somewhere else to work? In the end, you want to be in an area that’s in demand, with a growing population. Secondly, you need to look at the employment statistics. Is there a diversity of employers when you look at the census data? He adds “I would avoid towns that have only one major employer, a good example would be like a mining town.” Additionally, areas with multiple schools, universities, or colleges are also good spots to consider.
Number three, he says, is to look at what’s happening to the population growth. Are people moving there? Number four, you want to see infrastructure. What projects are being built in the area? Are there new highways? Is there transit? What are the government initiatives in the area like an immigrant center? This means that the government is trying to push people to that area. He further adds that in such areas, what you find is a lot of demand for rentals and then a lot of demand for newer single-family or newer homes small, starter homes for families.
Number five is to look at the average income of the area and do you have income that’s above average. Lastly, number six is to look at what is being built in the area. Are you seeing large swaths of land with houses being developed? Or are there large apartment buildings being developed? The rampant development of apartments can impact both the demand and the prices of rental properties. In conclusion, he says that these are some of the things to keep in mind when you are looking to invest in new areas to help you make informed decisions.
Important Links and Resources
Quentin D’Souza is the Chief Education Officer of the Durham Real Estate Investor Club. Author of The Action Taker's Real Estate Investing Planner, The Property Management Toolbox: A How-To Guide for Ontario Real Estate Investors and Landlords, The Filling Vacancies Toolbox: A Step-By-Step Guide for Ontario Real Estate Investors and Landlords for Renting Out Residential Real Estate, and The Ultimate Wealth Strategy: Your Complete Guide to Buying, Fixing, Refinancing, and Renting Real Estate.