7 Steps for Picking a Strong Real Estate Market (Part 2)
By Marco Santarelli
In part one of 7 Steps for Picking a Strong Real Estate Market we discussed the first four litmus tests required for investing in a suitable market. In this second part we will cover the last three tests to consider as part of your investment due diligence:


5) Healthy Ratio Between Rents & Purchase Prices
Common sense dictates that there should be a small premium attached to home ownership compared to rent. However, there are many high-priced real estate areas where it is drastically more expensive to own than to rent the same house. Why buy when there is such a huge pricing disparity between renting and ownership?

When the home ownership premium is too high it encourages foreclosures; if your home is declining in value and it is much cheaper to rent than own, you will be more willing to walk away from your home.

The inverse of this statement is also true. If it is cheaper to own than rent and home values are stable, you will do everything possible to keep paying your mortgage. In most of Dallas, for example, it is the same cost or cheaper to own than to rent. This substantially reduces the temptation and need for an owner to walk away thus further perpetuating a cycle of stable home values and rents. Stable appreciation and positive cash flow over the long haul result in hassle-free investment performance compared to the roller coaster of price speculation that many ‘investors’ get caught up in.

In the most recent real estate boom and bust in California, Florida, Arizona, and Nevada many speculators ignored the fundamentals of cash flow and overpaid for properties relative to the cash flow those properties could produce. There was a buying frenzy that drove prices up. When the prices peaked, speculators ran to the exits and prices crashed. Yes, you can make a lot of money in a short time, but you can also get creamed. Slow and steady wins the race.

6) Access to Quality of Life Amenities (arts, entertainment, low crime, warmer climate):
People will move to a new area for a job, but they and their family will stay longer if there is high quality of life: an arts scene, amenities, restaurants, good school, low crime rate, nice weather.

The United States is experiencing a population migration away from the colder parts of the northeast and Midwest into the warmer climates. Not only are warmer climates more desirable to live in, they often result in less expensive real estate maintenance. Freezing temperatures are harder on real estate than hot summers.

7) Comparatively Low Cost of Government
When you pay more taxes you have less money to spend on other things. Businesses are attracted to areas with a low cost of government. In places where taxes are low, businesses are generally more prosperous. Profitable businesses are good for real estate owners.

There are seven states with no state personal income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. How can Texas, a state with no income tax, finish the year 2008 with a $11.7 billion SURPLUS when the national economy is in shambles and forty-four states finished the year with major deficits? Texas has a history of conservative spending, balanced budgets, a reluctance to borrow money, and a very stable economy.

If a government is continually borrowing to fund its operations, the cost of that borrowing is passed on to the taxpayers in the form of higher taxes and/or lower services. When you own real estate, your silent business partners will always be the taxing authorities of the federal, state, and local governments. I prefer that business partner to be as silent as possible.

Want To Be A Passive Investors, Not A Landlord?

Invictus Cashflow handles the entire process from renovation to leasing to management. Sit back and receive "mail box" money from your investments each month without the hassle. Want to learn more?... Click On The Button Below To Chat With An Investment Counselor About Turnkey Real Estate

Want To Be A Passive Investors, Not A Landlord?

Invictus Cashflow handles the entire process from renovation to leasing to management. Sit back and receive "mail box" money from your investments each month without the hassle. Want to learn more?... Click On The Button Below To Chat With An Investment Counselor About Turnkey Real Estate
2 Out Of 3 Millionaires Have Real Estate In Their Investment Portfolio, So Why Don't You?
2 Out Of 3 Millionaires Have Real Estate In 
Their Investment Portfolio, So Why Don't You?
About Norada Real Estate Investment's History
Marco Santarelli, started investing in real estate at the age of 18 with a single townhouse that he bought, renovated, leased, and managed himself. He has continued to build his real estate portfolio to over 84 units of single family homes, duplexes, and small apartments.

His company, Norada Real Estate Investments, founded in 2003 was a pioneer in the turnkey real estate space. They were the second nationwide provider of full refurbished, cash flowing, and ready to rent units to investors. 

With properties in 18 markets as far south as Florida to as north as Michigan, ranging from single-family homes on up to four plex multi-units, Norada Real Estate has a investment property for every type of investor no matter their experience level or size. 

Author: 
Marco Santarelli

Marco has learned the inside and outs of real estate through years of hard work and doing it himself. Now he shares his strategies to getting started to people just like you on this blog and as real estate mentor at Norada Real Estate Investment.

Author: 
Marco Santarelli

Marco has learned the inside and outs of real estate through years of hard work and doing it himself. Now he shares his strategies to getting started to people just like you on this blog and as real estate mentor at Norada Real Estate Investment.
RAVING TESTIMONIALS
RAVING TESTIMONIALS
"Your commitment to always give value to your prospects (web site tools, blog, personal time, etc.) is a terrific distinguishing attribute and sets Norada apart from other real estate firms." - E. Hauber
"Your commitment to always give value to your prospects (web site tools, blog, personal time, etc.) is a terrific distinguishing attribute and sets Norada apart from other real estate firms." - E. Hauber
"The process was incredibly easy and the investment exceeded our objectives. Thank you for providing us the opportunity to hit a home run and strengthen our financial portfolio!" - LeRand D.
"Simple process and very reliable guidance -- buying through Norada is a breeze!" - Daniel Brown
"Marco was professional, helpful and informative throughout my initial investment opportunity. His knowledge, guidance and support made my experience exceptional!" Derek Pines
"The process was incredibly easy and the investment exceeded our objectives. Thank you for providing us the opportunity to hit a home run and strengthen our financial portfolio!" - LeRand D.
"Your company and website provide an awesome resource for the aspiring ‘turn-key’ investor." - S. Thompson
"Marco was professional, helpful and informative throughout my initial investment opportunity. His knowledge, guidance and support made my experience exceptional!" -
Derek Pines
Have You Read 
Our eBook Yet?
Have You Read Our eBook Yet?
OTHER TRAININGS
Top 10 Real Estate Investing Book Recommendations
30 Min. Turnkey Real Estate Accelerator Training

Top 10 Real Estate Investing Book Recommendations
30 Min. Turnkey Real Estate Accelerator Training

10 Features of A Profitable Rental Property
10 Rules of Successful Real Estate Investing
Current Housing Trends That Will Change The Market In 2019 And 2020
10 Features of A Profitable Rental Property
10 Rules of Successful Real Estate Investing
Current Housing Trends That Will Change The Market In 2019 And 2020
Nel Caguiat
Nel Caguiat
Investment Counselor
Investment Counselor
Our Investment Counselors Are Here To Help
Norada Real Estate is here to guide you through the entire purchase process. Even if your a first time or a senior investor our team will make the entire process easy and stress free, so you can start earning income from turnkey rental properties.
PROPERTY MARKETS
Atlanta, Georgia
Birmingham, Alabama
Boise, Idaho
Cape Coral, Florida
Chicago, Illinois
Cincinnati, Ohio
Cleveland, Ohio
Dallas, Texas
Dayton, Ohio
Horn Lake, Mississippi
Houston, Texas
Huntsville, Alabama
Indianapolis, Indiana
Jackson, Mississippi
Kansas City, Missouri
Little Rock, Arkansas
Memphis, Tennessee
Milwaukee, Wisconsin
Montgomery, Alabama
Oklahoma City, Oklahoma
Palm Bay, Florida
Quad Cities Metro
Saint Louis, Missouri
Salt Lake City, Utah
Ph: 855.792.0220
Info@turnkeypropertyinvesting.com
San Antonio, Texas
Tampa, Florida