1. Ignoring local market conditions
There are two levels of due diligence required to evaluate a real estate investment--the market and the property. And of the two, local market conditions trump everything else.
A great property in a bad market can be a big loser. A poor property in a great market can be a gold mine. How do you know the difference?
Every market is different, and a deal technique or property type that is profitable in one market it does not mean the same holds true anywhere else.
Analyzing the demographic trends of population growth, income, and employment in the local market will tell you where opportunity lies, or not. It will also show which property types are in demand, or oversupply. Those conditions will make or break your investment.
Investing in an area with declining demographic trends is destined for trouble. So learn your market. Then listen as it tells you how, when, and where to invest.
Please stay tuned for more details.
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