Any great real estate investment market needs this one thing. Without it, there is no long term sustainable growth. It is evidence of other important fundamentals. What I am referring to is population growth.
Population Growth
Without population growth, your selected market is at risk of decline as well as your investment. There are plenty of markets with population growth. When observing population growth trends, we review the last few decades and not only the last few years.
Driving Forces
Population growth is evidence that there are attractive forces to the subject market. This could be jobs, quality of life and other attractions. For example, there is population growth to the southeast region of the U.S., because people want to move to warmer climates, get out of the more dense and populous major cities and live in lower cost of living areas. These same changes in preference are influencing population growth in secondary and tertiary markets, especially in this post-COVID environment, where residents of major cities want to live quieter lives.
Stick to the Recipe
Yes, you may do okay by investing in a city with flat or even declining populations; however, the better wealth building opportunities are in those many markets where there is growth as evidenced from the years prior. Population growth is fundamental market selection for to any real estate investment.
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