Pittsburgh, PA (PRWEB) September 11, 2012
Western PA Real Estate Investor’s Association members are always looking for property bargians. The traditional mantra for evaluating real estate investment potential is "location, location, location." And current trends in the Pittsburgh real estate market seem to offer high profit potential. For example, home values in the Shadyside area increased over 40% in the past year.
Of course, real estate investing is not without its challenges. The desirability of the Shadyside area means that bargains there are few and far between. And since the goal of the investor is to make money, being able to buy low may be just as important as the ability to sell high.
Many investors are finding that the greatest profit potential lies just beyond the current "hot" market. It's important to learn what factors are driving the market forces. At the neighborhood level, these factors are commonly schools, neighborhood amenities, and convenience factors. The greatest profit potential, therefore, may be in neighborhoods similar to, or adjacent to, Shadyside.
The entire Pittsburgh area housing market has enjoyed low unemployment figures. Since most of the foreclosures that plague the rest of the U.S. housing market and drive lower market values are directly attributed to job loss, this is a great advantage for local investors looking for a stable market.
Because of the desirability of the Pittsburgh area, locating prime investment opportunities may be more of a challenge. Some of the best investment opportunities are never advertised publicly, so having a network of reliable contacts may be essential.
Developing a "farm" area can help you identify profit potential. For example, one WPREIA noticed a rapidly deteriorating rental property in her "farm" area. When the tenants abruptly departed overnight, the investor contacted the owner. The owner, fed up with tenant damage, sold the home to the investor for a ridiculously low cash price. Luckily for this WPREIA member, she had attended all the club meetings, read the newsletter, and knew how to identify a bargain when she saw it. For anyone interested in learning how to work a “farm”, go to the WPREIA web site and sing up for the free newsletter. The Pittsburgh based real estate investment club is now offering a free “how to make money in real estate” book for each person who signs up in the next 90 days.
"For rent" and "for sale by owner" signs can also indicate potential investment opportunities. Even real estate agencies may be a source of referrals--every agency has a handful of "less-desirable" listings that can represent an opportunity to fix and flip.
Of course, the overall goal of real estate investing is to make money. And no matter where the investment is located, one current trend in the U.S. is the decline of the middle class. While many investors prefer to focus on the upper-class market, rapidly rising rents and government programs subsidizing those rents may represent a hidden opportunity for investors in the lower-class market as well. With this change in the target tenant market, the need for additional landlord caution cannot be overstated. Choosing the wrong tenant can turn a great investment into a nightmare. That is why companies like Background report 360, are increasingly valuable to all investors.
The biggest problem with a textbook opportunity is the level of competition from other investors who studied the same textbook. But networking with reliable contacts, developing your own farm, and closely monitoring local trends can put you in a winning position every time.