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Do You Recognise The 10 Key Factors That Drive Real Estate Values Up? Part 1

Buy in an area that has a future not a past

Many investors make the mistake on investing in a city or town based on past performance. The successful ones look for potential.  Real estate values can go up or down depending on 12 major events.

4 factors we have no control over:

Mortgage Interest Rates:
Low interest rates will drive values up and will keep an investor’s expenses down. BUT low rates also allow more renters to become home owners and therefore increase vacancy rates. An increase in rates can be a good thing for a landlord.

Increase In Average Incomes:
As average incomes increase, real estate values will move upward. Look for towns where the average income is increasing faster than the provincial average: real estate prices will then also increase faster than the provincial average. Note that it is the rate of increase in income not the actual amount. Even if the income is currently low, if the rate of increase is above average then prices will increase at a faster rate and equity will be built more quickly.

Increase In Population:
Supply and demand! Make sure that the increase in demand is due to the population growing. In cities such as Toronto this can be due to immigration from other countries. In Wasaga Beach, on of Ontario’s fastest growing towns, or Barrie people are moving from other areas of Canada. This demand will drive real estate prices up. New jobs or major new business moving to an area are a great sign of future increase in demand.

The Ripple Effect:

When a specific area has a boom in prices then the real estate in the surrounding areas will follow. This can be on a large scale such as the relationship between Barrie and Toronto or even in a neighbourhood; the east end of Wasaga Beach has several new subdivisions being built and these more expensive homes will increase the value of those in the surrounding streets.

Do You Recognise The 10 Key Factors That Drive Real Estate Values Up? Part 2

Do You Recognise The 10 Key Factors That Drive Real Estate Values Up? Part 3

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This entry was posted on Saturday, May 30th, 2009 at 6:59 pm and is filed under Investment Opportunities. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Do You Recognise The 12 Key Factors That Drive Real Estate Values Up? Part 2 | Wasaga Beach Real Estate-Wasaga Beach Homes For Sale-Wasaga Beach News said at May 31st, 2009 at 5:49 pm

   [...] Do You Recognise The 12 Key Factors That Drive Real Estate Values Up? Part 1 [...]

2. Do You Recognise The 10 Key Factors That Drive Real Estate Values Up? Part 3 | Wasaga Beach Real Estate-Wasaga Beach Homes For Sale-Wasaga Beach News said at June 19th, 2009 at 7:32 pm

   [...] Do You Recognise The 10 Key Factors That Drive Real Estate Values Up? Part 1 [...]

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