I often get asked: what’re the best properties to buy?
For most folks, it won’t be:
-major shopping plazas
Well, I expect demand for office buildings to grow slowly, if at all, because of competition from the home office and co-working spaces, based as they are on a booming gig economy.
The competition to acquire assets like major regional shopping centers is fierce with large predators roaming the countryside equipped with ultra low cost (and sometimes negative cost) financing that entrepreneurs just can’t match.
And land just takes too damn long to develop in a municipal environment that is rabidly anti-development, and bogged down by a seemingly infinite series of studies and insatiable appetite for public benefits paid for by private developers.
The lowest risk portfolio and one that is within the reach of most people is: a series of residential rental holdings, often single family homes with an in-home suite or coach house in back.
I wrote to a client of mine recently, a woman in her 30s that I coach. Here are some of the things I suggested she should look for:
-what price are you paying/remember you make money in real estate when you buy not when you sell so buy smart
-what will it cost to animate/add an in-home suite with separate entrance, add a tech package, add backyard storage shed(s) or workshops…
-how close is it to existing transit
-how close is it to major employment nodes (colleges/hospitals/tech/gov’t)
-how walkable is it (again how close to jobs/shopping/learning/mass transit/health care/recreation …)
-how rentable is it
-check out neighborhood demographics (who is your target renter)
-neighborhood safety and desirability
-presence (or absence) of gentrification/folks renovating/adding to their homes/tearing down existing ones and replacing them with bigger homes or doubles
-proportion of renters (smaller proportion of neighborhood renting is better)
-ability to add coach house
-locate closer to downtown/not seen as suburban
-does the area support mixed use (ie, are services available nearby, eg, c-store, walk-in clinic…)
-is the area densifying (eg, doubles replacing singles) and intensifying (eg, more work from home)
What to look for in a bungalow or split level:
-min lot size
for larger coach house
entry for basement
-at least 2
baths on main level (including ensuite) and 1 more on lower level
postscript: see also–
What Info You Should Have on Each Property
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