the-abcs-of-real-estate-investing-ken LifeFeeling

was before a boom in rental properties occurred in the mid- to late-1990s. After all, the
town is a tremendous draw for winter visitors and part-time residents, a good market for
rental communities.
Employment stability is also something to consider. As you evaluate your market and
submarket for employment, look at how stable the employment base is. Are the companies
reputable? Are their products or services in ever growing demand? Is the mix of companies
diversified? These are indicators of stability. Just look at Houston in the 1980s. Rental
properties were booming and then the oil industry came crashing down, taking with it
banks, hotels, home-building companies, and numerous other businesses. Apartments were
vacant all over town, so to lure renters, owners and property managers were offering
ridiculous move-in packages, including six months’ free rent, free televisions, and no
security deposits. A significant drop in the local employment had a significant impact on the
economy.
POPULATION
In a world of choices, choose to have your first well let’s face it, all your investment
rental property where the people are! We’ve already established that you need a stable and
growing employment base, so it makes sense that you’d also want to be in an area where
there are lots of people. People who are your future customers. That may be a bit cut-anddried
for the new investor who’s thinking about taking advantage of a “great deal” on a
single-family home on the outskirts of town, off the beaten path. While it may be a
wonderful property, and seem like a great deal, that’s meaningless if nobody is around to
lease it. In this book, you’ll find that once the market is selected, the key to success is in the
property itself and valuation is a function of its operations how well it operates now and
how well it will operate in the future. By operations, I mean how much income the property
generates, what the expenses are, and what the overall profitability is. Operations success in
this business relies on a market of renters.
People certainly go where the jobs are. But they also migrate to places that have a
certain persona or living experience built into the area. That’s a somewhat vague concept, I
know, so it may be best to use examples rather than try to explain it. If you’ve ever been to
Venice Beach in California, you know that it’s a submarket of the Los Angeles market that
has a definite persona or living experience. First of all, it’s a California beach town that
conjures up all the fun and freedom that the California Office of Tourism, Hollywood, and
the Beach Boys spent decades promoting through commercials, movies, and songs. Next,
it’s a submarket even among other beach town markets that has a reputation for being edgy,
avant-garde, and youthful.
Purchase investment property in Venice Beach and you wouldn’t have to say much
more. Lots of people are drawn to this lifestyle and the persona of what living in Venice
Beach means. Contrast that with the Phoenix submarket of Dobson Ranch. There are rental
properties in this master planned community, but the area has no real persona that drives the
multitudes to it. Sure it’s a nice place to live and a great place for families, but there is no
major image that draws population. I’m sure most everyone reading this book has never
even heard of it.
Other areas that come to mind when I think of living experience and persona are Key
West, Florida, and Coronado Island, California. They both are exclusive beach resort
communities. Whistler, British Columbia, is another example and the name is almost