When looking for the next real estate hotspot there are many different aspects consider. Each one on its own may not confirm the next real estate hotspot but if you put a number together they can give a very strong indication. We will now take a look at five ways to spot the next real estate hotspot before the mass media blows the secret.
Corporations relocating
When we mention corporations locating at this moment in time everybody will probably think of Amazon which is looking for a second head office. However, we are not necessarily talking about massive corporations relocating but maybe a number of small to medium-size corporations switching their head office or increasing their activity in a specific area. These corporations have access to demographics and changes in the business market that private real estate investors can only dream of. So, why not jump on board and piggyback the massive investment and research these corporations carry out?
Airbnb prices
Airbnb price hikes can indicate the next real estate hotspot as they have for many investors in years gone by. Prices on the Airbnb website are fluid, real-time and indicate changing demand and supply on the ground. The company may well have its critics but each local Airbnb office will have its ear to the ground and be well aware of changing trends before they hit the media. In effect you can consider Airbnb price movements as you would share prices on the stock market – buy into the ones moving higher!
New construction
With any increase in business activity an increase in construction activity will follow, more demand for office space and ultimately more demand for residential property. At the height of the UK property market, as one example, some investors would use the crane index which was simply an index of the number of construction cranes visible in one area. It may be very basic but for many people it highlighted potential areas of interest and possible real estate hotspots of the future.
Quiet gentrification
While some people may associate the term gentrification with “the process of making a person or activity more refined or polite” it also relates to the renovating and improvement of residential property or a particular district. Many people believe that quiet and subtle gentrification of a district can ultimately lead to a house price boom. The idea being that the foundations are being laid to attract middle-class investors to areas which were perhaps historically not suitable for their requirements.
Population growth
While population growth can occur in low, middle and high quality residential areas, when considered with other factors it can help to indicate a potential real estate hotspot. The greater the population in a particular area the more demand for restaurants, retail outlets and other facilities which increase investment in the area, improve demand for residential property and can be the catalyst for significant real estate development. Sounds very simple?
Conclusion
The idea of identifying a real estate hotspot of the future is to get there before the masses realise what is going on. Have your investments in place before the mass media talk up a particular area and ensure that you are “in on the ground floor”. Obviously it is not as easy as this but the sooner you invest in a real estate hotspot the more chance of making money in the long term. Once the mass media begin to talk up a particular residential area it can often be too late to invest.