Like any other investment, Real Estate can be researched from a top-down or bottom-up approach. A financer can look at properties starting from the particular asset class or purchase price and then determine the location with the most opportunity.
They can also research a particular area and then analyze the granular details. In previous posts, Quetzal has analyzed asset classes ranging from industrial investments to commercial real estate. In this blog, we will look at a broader perspective by analyzing specific city investments. We will explain why investing in larger markets may not be the best opportunity for everyone.
Key Trends
A lot of investors, homeowners, and renters are charmed by cities such as New York, Washington DC, Boston, LA, San Francisco, and Chicago. These big six locations in the United States are termed “24-hour” cities. They are popular due to job opportunities, social experience, and overall lifestyle that is available in a busy atmosphere.
However, these locations are overpriced and may not be feasible for every individual. Investors may find more value at a lower price in a less popular city. A homeowner may prefer a slower pace of life and lower costs. A renter may not be able to afford these cities without sacrificing other accommodations. “18-hour” cities may offer a solution to these problems.
These cities have become a target for millennials; especially, given the rise of remote work. They offer the amenities, recreation, and entertainment opportunities of a large 24-hour city at a lower cost. There may also be tax incentives and business-friendly opportunities that may not be found in larger and more active centers. These locations are characterized by the following:
- Mid-sized city with attractive resources
- Population under one million
- Higher-than-average population growth
- Higher-than-average job growth
- Higher-than-average wage growth
- Lower Valuation
- Higher Capitalization Rates
Opportunity
For investors, they present opportunities to stay out of major markets while still realizing significant returns. This is due to a higher demand resulting from population growth. The growth lacks an available inventory due to less established investment competition. It also creates an opportunity for new businesses or large enterprises to invest in parks and stadiums.
Below are several examples of “18-hour” cities:
- Salt Lake City, Utah
- Knoxville, Tenn.
- Orlando, Florida
- Portland, Oregon
- Charlotte, North Carolina
Conclusion
At the end of the day, only you can determine whether real estate investing is right for you. As a starting point, think through your personal circumstances and the aforementioned considerations. Know that every investment strategy will be different, that each investment strategy has its own pros/cons, and that all investing carries a risk so as you continue to gauge whether you should invest in real estate, do your proper due diligence.
Investing in Real Estate comes with several advantages. Navigating the real estate investing process can be difficult, but you do not have to do it alone. We are here to help.
How You Can Get in On the Action
Cash Flow Champs is a privately held best real estate investment firm that focuses on acquiring and managing opportunistic and value-add multifamily real estate properties. The company specializes in repositioning well-located assets in emerging markets surrounded by positive demand drivers such as population growth and job growth.
Cash Flow Champs partners with entrepreneurs and busy working professionals interested in investing in real estate but that lack time to navigate the process. Alongside our partners, we aim to bridge purpose and profits in a manner that allows us to improve the lives of the residents in our communities and the neighborhoods where we operate.
In the words of Robert Kiyosaki, the poor and the middle-class work for money. The rich have money to work for them. If you are an individual that wants to build and maintain generational wealth through real estate, all while making a positive impact on the lives of residents and the communities where you invest, we’d love to explore opportunities for synergies.
Schedule a brief call with us so we can get to know you better, understand your life goals, and determine where synergies may exist.
This information presented on this site is for informational purposes only and does not constitute an offer or solicitation to sell shares or securities in the company or any related or associated company and is not a recommendation to pursue a specific investment opportunity. Any such offer or solicitation will be made only by means of the company’s confidential Offering Memorandum and in accordance with the terms of all applicable securities laws and other laws.