If you are planning to invest in a particular country, city or town, investigate whether other developers have plans for the area too. You should be asking questions like these . . .
- Are there large undeveloped tracts of land in the area that could interest developers later on?
- Is a big homebuilder planning to build a new residential complex?
- Is a commercial development organization about to build a new mall or renovate an older one?
- Does another developer have plans to move in and start buying up single-family homes for renovation and quick turnover?
Don’t look at all such activities as competition – even though some competition might be part of the picture. The fact is that the presence of other developers can affect the value of your properties very positively. If other developers are investing in an area that was previously perceived as “marginal,” for example, their activities can lift the value of your properties too.
But at the same time, regional development can sometimes work against you as an investor. If you own two or three modest one-family homes and intend to rent them out, the last thing you want to hear is that some nearby vacant land has just been acquired by a developer who will build a 150-unit residential complex that will charge low rents.
But as a real estate investor, you don’t want to be surprised by such development plans – you want to know about them and factor them into your plans.
How Can You Learn what Other Developers are Planning?
Call Town Hall and ask what real estate projects are pending before the town’s planning board. If a large new store is planned for a community, for example, its developers need to appear before the local residents in board meetings to answer questions and make a case for why their store will be good for the community and not cause gridlocked traffic or other problems.
And take these steps too . . .
- Talk to local business owners, attorneys, and retailers. They are often in the know about what is happening in the area where they do business.
- Ask your attorney to tap into the local grapevine. Lawyers tend to know each other, and often share news about local real estate transactions.
- Go to the public library and read the last year’s local and regional newspapers. They are an excellent source of information about developers’ plans in the area.
How to Use a Small Owner-Occupied Multi-Family Home to Get a Great Start in Real Estate Investing
Five Real Estate Investment Deal-Breakers
Get your Real Estate Salesperson license
Before Buying Properties Check Out Local Employment Trends
Train to be a Property Manager
Personal Real Estate Coaching
How to Hire a Great Property Manager