Four Different Investment Principles
Sunny with the Synergy Real Estate and Property Management here in Bakersfield, California. And today we actually wanted to go over four techniques or thought processes to find investment properties in areas that you may not be as familiar with.
Right so kind of the one of the main things that we’re looking for here is we want to invest in areas that people can afford. So regardless of the market if we’re looking at LA, if we’re looking at Florida, if we’re looking at Cincinnati, or if we’re looking at Oklahoma.
How Do We Know Where To Invest?
Doesn’t really matter if we want to invest in areas where a majority of the people can afford. And so obviously in LA, that’s a very different price point than in Oklahoma City or even in Bakersfield, right. So that’s something that is very important because when we do that we invest in areas that people can afford. Then we know that if we do have to sell the property for whatever reason there’s going to be a large buyer pool for that property. If we do have to rent the property for whatever reason we know there will be a larger renter pool for that property.
So that kind of provides a little bit of stability for us knowing that most people in this area will want to live here and can’t afford a property like this. Therefore we want to kind of move into that area. Another thing that we look at we want to look at job growth. As these cities, which you may not know because you haven’t invested in before, are growing.
We want to look at, well what is that growth based on. And we want to make sure that those jobs are coming to the area not only today but into the future and those jobs that are coming are sustainable and are going to pay a living wage moving forward.
Bakersfield Job Growth
Here in Bakersfield, we’re having transportation and logistics. Essentially, because within four hours of Bakersfield you can reach 90% of California’s population. And so because of that we’re seeing all of these new jobs. As far as truckers as far as industrial facilities are concerned as far as different logistics positions are concerned. The question becomes okay well clearly there are a lot of new jobs coming to the area and that’s going to be moving into the future as well.
Now the question becomes, “those jobs that are coming into the area. Are they enough to be able to help someone purchase a home as they move into this area and get this new job?”. We want to make sure that those salaries that are being paid are in fact, copacetic with the actual property prices that are charged right.
But if you’re in Bakersfield making 15 bucks an hour.
There are places where you can buy a house, and even if you have a certain person working in a home, you know, that’s 60,000 a year that you’re going to run through the end before taxes. You would definitely be able to find a property that you can afford and move into. So definitely something we want to look at right as jobs grow. As the income grows, we want to make sure that those are secure. We want to make sure those are going to be here in the future and that more jobs will also show up in the future as well.
Also Read: How We Work With Subcontractors
The next characteristic here we want to make sure that we invest in an area that has a strong rental demand. So, if you are looking at a property that is a really nice property in a really nice area but the rent is going to be high.
Is that a place that you really want to purchase?
The question becomes, okay. If I’m buying in this class A neighborhood and again let’s take Bakersfield and rents do make sense to work for whatever characteristics I’m looking for. Well is that a place that walks around our house right because we can average rent in Bakersfield for three bedroom property is $1600 a month.
However, this property being a class A neighborhood is $2500 in a month, then, is that property going to be rented easily and quickly with a lot of different renders that would want this property. Because if not, that could be a barrier to entry for us or a barrier against our investment as well want to make sure that you know it’s not necessarily the lack of income that is going to kind of drive the bad investment.
It’s the lack of being able to rent the property and having that vacancy.
That will really take your investment because in a given month you are going to lose 1000s of dollars versus discounted rents $50 a month, really not going not going to make too much difference, right.
So, these are a couple of different things we want to look at when we’re asking these characteristics that are difficult to narrow down: where do you help with commercial property that is our specialty.
We would love to help you on the real estate broker side, we also have a property management company and a construction company, so we can kind of help you to rehab your properties. If you’re looking to just find this property or, you know, just the rents for the tenants that are there, a target group plan for how we can do this moving forward. We’re more than happy to help.
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