Recognizing Transitional Neighborhoods

Real estate investing could set you up for life, as long as you know how to locate the real winners and separate them from the hype. Everyone wants to purchase a sure thing, so when the hottest new neighborhood has homes on the market, it’s easy to jump at the chance to own one of the homes. The problem with buying a house in the trendiest neighborhood in town is that you will likely pay top dollar for it. When you pay top dollar, there is nowhere else for that price to climb. The key to real estate investing is to buy low and sell high, and you’ll have already locked yourself out.

Of course it’s wise to purchase homes in the trendiest neighborhoods in town, but the only way to make money at that is to buy the homes before the neighborhood gets really hot. You might think that you’ll need a crystal ball to determine which neighborhoods are making the change, but the truth is that there are plenty of signs that you can watch for. When you find a transitional neighborhood that is making the change, you can jump right in and grab great deals on the houses before they reach their full potential.

First of all, look for signs that the houses are occupied by homeowners. Tenants can take good care of houses, but you really want to see the landscaping, new paint, and home improvement going on. When you see that, you will know that the neighborhood is well on its way toward beautification. Small businesses will begin to move into the area, including chef-driven restaurants and boutiques. They will be few and far between at the outset, but you will start to see more businesses follow if the first intrepid companies do well. This is a sign that the neighborhood is really on the rise, and it’s the best time to start considering some of the houses in the area.

Finally, when banks start moving into the neighborhood, you will know that the money is following. After the banks open up shop, you will notice that larger chain businesses follow suit, and then the transformation will be complete. If you haven’t made your real estate investing purchases by that point, then you will have missed out on your chance. Take a look around your town and see if there are neighborhoods in various states of transition. You will find excellent possibilities for your real estate investing future.

By: Ken Boutilier

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Ken Boutilier is an Atlantic Canadian based real estate investor, trainer, speaker, consultant and entrepreneur who has combined his knowledge of real estate investing and Internet marketing to train and teach others how to increase their cash flow through successful real estate investing. Learn more at Real Wealth Atlantic.