Migration isn’t just for birds and beasts making their annual trek to better feeding spots and warmer winters. Humans migrate too, and in real estate-speak, the patterns of human migration – into or out of a particular area – can be pretty good indicator of investing success.
In-migration is a real estate term that describes movement toward a particular city or region. If people are moving into a given area, it means that they’re attracted by desirable cultural, social and economic elements to be found there.
A booming job market, an influx of new businesses, or a thriving cultural scene might draw new residents. Good schools and even parks and coffee shops might be factors too. Whatever the reasons, in-migration can be a good sign for investors looking to build wealth through income property.
Why? A thriving local scene means a sustainable economy, desirable tenants, and rising home prices. A robust economy with a good employment outlook promises to keep renters stable and employed, and property values going up.
That’s what happens in areas such as the “Sun Belt,” those sunny Southwestern cities that attract migrants fleeing eastern cold and stagnant local economies for places with better opportunities and more growth.
The opposite can happen too. “Out-migration” refers to movement the other way, away from areas in decline. It’s a pattern seen in many depressed areas of the country such as Detroit and other places in the so-called “Rust Belt.”
In these areas, manufacturing and business are declining and residents are fleeing decaying neighborhoods for places with better opportunities and weather. Home prices in these areas may be low, but that also points to limited income opportunities and lower rents and a dwindling pool of potential tenants.
Investing decisions rest on the interplay of many factors. But keeping an eye on the migration patterns of the typical human is a key factor in finding the best opportunities for investing success through diversification – which is just what Jason Hartman recommends. (Top image:Flickr/ardyll)
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