Understanding market trends and adjusting to the market

There are some very basic principles related to determining what the current market is for a specific property and studying any trends that may be occurring in different geographic locations even on a local basis. For instance, for some economic reason, such as a new industrial plant that is going to employ many people. Example: down in a small town not far from here, a major retail chain acquired a large tract of land and plans to build a major distribution center. This will impact this little area with several hundred jobs. To understand the relationship between the numbers of jobs that are created and the relationship of the respective income brackets should provide insight into the size, price, and location of properties that will be directly impacted by this increase in the job demographics. Anticipating this impact will allow for entrepreneurs to take advantage of what is happening in their community. For instance, if they are going to have six hundred new jobs, and this is going to require an influx of people to fill the jobs, we must provide the necessary housing, restaurants, etc. Studying these trends can usually be accomodated by information provided by your local Chamber of Commerce or from your zoning boards and other growth management departments of your local governments. These developments can take years to clear through the maze of governmental bureaucratic nightmares. Therefore, I recommend that you learn to go on-line and search your government sites for zoning changes, subdivision platting and recording, Planned Unit Development applications and approvals. Learning to be current with all of the information that is going on in your community is essential to understanding trends that truly affect your decision-making when purchasing and/or selling real estate. Such a scenario would suggest that values and certain price ranges based on the number of jobs and income is going to positively affect the property values. Speculating on a major happening in a community in your decision-making process is a very dangerous investment strategy. The safety factor is to do your due diligence based on current sales in your chosen investment area. This will allow you to make positive determinations as to purchase prices for your acquisitions, as well as sales prices for your inventory. One of the most important ingredients in your consideration when doing your due diligence is the average time on the market for the properties that have sold within the last six months that are comparable with the property you are purchasing or selling. Having a steady source of willing sellers and a steady source of willing buyers certainly are important but applying the principles we teach, and using our due diligence system,  is critical for a new entrepreneur or for anyone who has not adopted a plan of action wherein you cover all of your bases including your exit strategy. This information and system is offered in our PDP course.