The answer to the question of how to spot better property investment opportunities is to look for undersupplied demand first before looking for deals. Too many investors do it in the reverse, find the deal and then look for the demand; if you look for something then subconscious factors can sometimes make you find it.
For example, say you have heard great things about the Orlando property market, and the abundance of fantastic property opportunities there. You find a fantastic property investment opportunity, it's a resort development, and the write-up really sells it to you. It's tenanted, near the resorts, near a pack of malls, shops and amenities, and it all just sounds so wonderful, but of course you have always loved Orlando since you holidayed there as a child.
Because you have become so in love with the property there is every chance that your research could be skewed by your emotions, that you could overstate the potential of the opportunity.
Finding the demand before the deals greatly reduces the possibility of being driven by your emotions, and makes finding good opportunities to invest in property easier in other ways as well.
When you speak to companies seeking property investment advice and opportunities, if you do so having seen one of their properties, or a property in general this will give them an onus to talk up the potential because there is the chance of a sale there. But when you are looking coldly at an area to try and find an undersupplied demand you can simply talk about cold hard facts and figures.
Here are the facts and figures we need to be concerned with in the search for our next great investment.
Population Growth
This can be natural growth of babies being born, as well as migration of population caused by people coming into an area to find better employment opportunities.
Employment
When finding out about population migration, you will automatically find yourself cross-referencing with employment data, because you will be asking if people are likely to be moving into this area to find work. It doesn't matter whether you learn of migration whilst researching employment, or learn about great employment opportunities while researching population growth and migration, as long as you find out as much as you can about both.
Rental Occupancy and New Supply
This combination of factors is probably the biggest indicator when searching for undersupplied demand. An area with high and/or rapidly rising rental occupancy, coupled with sluggish new supply, indicates an area of undersupplied demand, and where we should start seeking out deals.
Needless to say this can be a good starting point in seeking out investment opportunities: searching for areas with high occupancy growth and limited new supply, and then digging down into researching employment and population growth when we find them. So there.
*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.