Why You Should Invest In The Urban Real Estate Market

Although many investors are leery when it comes to investing in urban neighborhoods, these areas possess a very appealing demographic of potential tenants. Listed below are 5 reasons why, you may want to consider investing in the urban real estate market.

1. Pricing- Now we’ve all heard the old saying that “You get what you pay for” but there are many hidden gems in the urban markets around the U.S. One rule always rings true in real estate investing and that’s to do your homework. Great deals can be obtained in any neighborhood and in any market so keep your options open.

2. Section 8 tenants – Imagine tenants on a waiting list because the U.S government subsidizes 80% of their monthly rent and they want to move in your rental property! The truth is this happens everyday across America in many inner city neighborhoods. These tenants are called section 8 residents and the U.S government is your rental insurance policy.

3. Fix and flips- Many builders such as KB Homes have reported huge losses at the end of 2007 but the truth is investors that really study the real estate market are eager to find great deals in today’s market. As a real estate consultant, I can personally attest to hundreds of deals that have come across my desk. The key to fix and flips in today’s market is selling the rehabbed property with incentives and preferably a tenant if it’s an investment property.

4. Government redevelopment- Often times the government funds projects to redevelop neighborhoods in many inner city areas across the U.S. The local government receives funding and usually offers attractive incentives to developers and home owners investing in these neighborhoods. This is a great way to keep your money in your pocket due to grants that may be available and you may even receive great deals on interest rates. So take advantage of the government spending our tax dollars, to improve neighborhoods you wish to invest in.

5. Location- Growing up my favorite board game was monopoly and I always tried to purchase the cheap real estate first because I could build homes and hotels a lot faster. Think of urban real estate investing the same way, you buy it low and sell it high when the opportunity presents itself, but in the meantime you collect rents and make a profit. There are many objectives to real estate investing such as appreciation, cash flow investing, etc. As you build your real estate portfolio you’ll find out that cash flow investing has less to do with location and more to do with making a profit. I hope this information helps to guide you in the right direction on your road to success.