Image by: Swampyank
By George Lamb

A beautiful house right in the middle of suburbia has caught your eye, huh? It’s relatively cheap, not in horrible condition and has your name written all over it in bold, black letters. It’s calling your name, but should you answer? I’m sure you came across innumerable horror stories about ridiculously high interest rates and such, but don’t let that scare you away entirely, as investing in a house can be very lucrative if done with a few things in mind.

Yes it’s risky, and most would argue that its a horrible idea, but if your guts telling you to do something, it may be tough to ignore its commands.

And if you decide to proceed, know that you must grow cognizant of the both the location and the history of the home, as well as the transportation, developments in the neighborhood and pretty much everything else in between. In short, you need to know it all–everything about the area you’re investing in.

Staying ahead of the competitors means putting in the time and doing the research. If you are new to this whole thing, it can seem daunting, but if you proceed with a few things in mind it may turn into a golden star to add to your portfolio.

#1) Analyze Local Pricing

First and foremost, pricing trends in the area of the home you are looking to invest in must be evaluated. As a potential investor, you should look to see if the prices of homes is rising higher in one area than another–and not only that, but to also check and see if the average housing price is higher or lower than the neighboring towns as well.

Doing this will provide some insight as to where the largest demand is, while in turn giving you a sixth sense when it comes to determining what prices are fair for certain properties and which ones are over priced. So if you’re looking to purchase properties at bottom prices, such information will be more valuable than gold. That means doing your homework is absolutely necessary–use real estate agents, the internet or even the local newspaper as research material, and proceed into the decision with the confidence of a seasoned realtor.

#2) Explore the Outskirts

Commuters may find areas near public transportation more desirable and therefore would be more likely to flood the housing market of any area that is in the process of building a major train or bus stop. And you know what this means, right? These areas are likely to go up in value once construction has finalized, so it’s important to scout the outskirts of any major city to find any areas that are in development, as most properties in major cities may already be over priced due to the immediate accessibility of public transportation.

If you’re worried about not being able to find such areas, you can always ask the local railroad, bus company or local town hall and check in on the particular areas where they plan on expanding their service.

Infrastructure can also be a sign that an area is up and coming and preparing for future development. Keep a look out for schools, traffic lights, shopping centers, community centers and roads under construction, because it may mean the community is preparing itself for a growth spurt.

As stated above, investing in a community of this nature can be very lucrative, and the best part is spotting new developments can be as simple as making a few laps around the community as you stroll by, keeping a watchful eye for any impending signs of clearing.

Turn your hunt for that golden star into adventure and infiltrate the minds of the people in charge of road and building departments. These guys should be aware of any impending projects in the area. If you’re lucky and have been blessed with a silver tongue, then they may even be able to provide you with some connections at the state level so you can find out if any state projects are taking place as well, rather than just relying on the basic county connections.

Anything to gather intel on the surroundings, and if that means becoming best friends with a real estate agent, then so be it–their advice may be the determining factor that will sway your decision.

 Is your portfolio riddled with gold stars that symbolizes your successful investment decisions? That’s just wonderful, but how about helping out some less fortunate investors by sharing any more insight I may have missed. We greatly appreciate it!