Property investors aiming at achieving high returns need to make smart choices with respect to the following three basic dimensions of any real estate acquisition:
- Favorable timing, to take advantage of global, macroeconomic, regional and metro-wide forces that are expected to exert strong positive influences on local markets and boost property incomes and values. Smart property investment timing means also evaluating thoroughly the market and understanding at which stage of the cycle it is at the time of the investment. Buying a property when the market is near or at the top of the cycle can hardly be considered as a smart real estate investment move unless some special conditions apply. Obviously, the best timing for buying a property is at or near the bottom of the real estate rent/price cycle.
- Property types that will benefit from anticipated positive macroeconomic trends and potential shifts of household and firm demand
- Locations that will capitalize the benefits of expected macroeconomic developments and economic growth by attracting the incremental residential and commercial space demands of firms and households, as well as shifting demand patterns due to income increases. In the case of national investors, the location choice incorporates two basic dimensions, which are consistent with the macro and micro nature of forces that influence property performance:
1) Selection of market/metropolitan area
2) Selection of sub-market/community within a given market
All three dimensions are very important, and if combined so that each dimension contributes in its own way to property value appreciation, their combined effect on property values and the investor’s return will be quite strong.