Key points
- Most investors focus on two things: how much rent the tenants will be paying and what the property looks like. However, they don’t realize that it’s more than just those two factors.
- The five demographic factors/metrics that drive success or failure in real estate investing, that investors should be keeping track of are: population growth, job growth, income growth, home price growth, and crime reduction.
- Never invest in a city where the population is not growing, no matter how much the cash flow is. Population growth is a factor that leads to income growth, that in turn leads to increases in home prices by up to 40%
- Crime reduction is an important factor because a lower crime rate in a city means low delinquency rate and low evictions.
- Spending money to acquire data and be able to make informed real estate investing decisions is wise and not a waste of money. Not investing in data and using it means you’re just speculating.
- There are no bad property managers; just bad asset managers. As an asset manager, part of your job is to take care of your property manager. His/her performance is a reflection of your performance.
- You can either take action or make an effort to educate yourself. But the one thing you can’t do is sit on the sidelines and be a spectator.
