Fundamentals of Real Estate Investing Washington DC

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There are three main criteria that must be addressed before moving ahead with any real estate investment. The key to a successful property purchase comes first from an evaluation and understanding of the area in which you'll potentially be pouring your capital. Today we'll focus on the fundamentals.

What makes a good property investment? First, look at what is driving the market. I'll give you the formula that I use to make profitable purchases. You can use these rules of thumb in any market to help you separate fact from fiction and leave emotion out of the investment.

The Top 5 factors you need to study:

Economy: Does your target area have a diverse economy or a single industry economy? The more diverse the economy, the better the buffer to weather out economic storms, especially when there are several industries that ebb and flow at different times, which creates more stability. Is there outside investment? If so, on what scale—millions or billions of dollars?

Population: Is your target region experiencing an increase of new workers, students or families? A growing population increases the demand for rental housing and home purchases. The younger the population demographic, the better; retirees may represent a niche market to sell property to, but they are unlikely to produce a long term rental and resale base. You need to determine whether there is an overall housing demand in the area. Is it growing faster than average?