For some, it’s the bright lights of New York City. For others, the crashing waves of the Oregon coast, the blooming cacti of the Tucson desert. It’s easy to fall in love with a place, much easier than a person. Something about certain places are likely to strike us, to stay with us as we live and travel, catching us when we least expect it in the breeze or in a photo album. Humans are very lucky in that way—we have the freedom to move from place to place, falling in love over and over again.
And while this love (like a lot of love) is a great thing, it isn’t the only thing, at least as far as real estate investment is concerned. The things that attract you to a place can be temporary, but the real estate market there is ever-changing. While you may love a place, it doesn’t always make sense to invest in income properties there.
Charlotte, North Carolina, is a great example. It was a good market until everyone began to invest there a few years ago, limiting the supply of available tenants and softening the rents. Just like that, Charlotte was no longer a great place to invest. Since then, Charlotte has begun to come back around—but we didn’t recommend it for a fair amount of time.
Approach decisions about your income properties in the same way you approach other business decisions. If it doesn’t make financial sense, it probably isn’t the right place to invest. Real estate is really a local market—the housing market is operating independently in every city, so if one is bad, move to another. We recommend different markets at different times and we’re not particularly attached to any of them. Make sure your investment advisor shares this philosophy to maximize your income potential.
Be Area Agnostic—don’t attach yourself to any one market and don’t be afraid to look for another that will make you more money. While it is easy to justify a place (just like a person), some places and people just aren’t right. A beach or blonde hair doesn’t guarantee that something or someone will always be in demand. Let yourself fall in love again and again. (photo credit: Rubem Jr via photopin cc)
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The Jason Hartman Team