3 Signs of an Up-And-Coming Neighborhood
Updated: Apr 25, 2019
It’s no secret that emerging neighborhoods are prime hotspots for real estate investments. Savvy property investors can spot an up-and-coming neighborhood quickly, take advantage of the area’s low property values, and make a decent profit off collected rent once the area fully transforms into a hip neighborhood.
One might wonder how investors can identify an emerging neighborhood, and how to know when an area is prime for investing. This process may seem mysterious, but property investors aren’t psychics – they just know how to spot the common signs of an up-and-coming area.
Emerging neighborhoods are attractive to young people looking to escape mundane life and get close to other hip, exciting areas. Trendy businesses are beginning to sprout in these areas, such as restaurants, grocery stores, and boutiques. When an investor knows what to look for, he or she can make smart purchases in these areas – long before the action begins.
New and on-trend businesses are an obvious indication that a neighborhood is increasing its property value. People like to be close to exciting things to do, including restaurants, bars, clubs, clothing stores, grocery stores, or movie theaters. The transformation can happen quickly in an emerging neighborhood – one trendy boutique opens in a previously undesirable neighborhood and almost overnight there’s a Starbucks, a Whole Foods, a new sushi restaurant, and more.
The presence of these businesses will make the area more desirable to live in. Purchasing a property and renting rooms to the incoming wave of residents will guarantee a high return on investments in this area.
Proximity to Other Hip Neighborhoods
People want to live in exciting neighborhoods with lots of activities, restaurants, shops, and businesses. People like to be close to things for ease and comfort, but the most exciting areas to live in are often the most expensive. This is especially true in city centers and downtown areas, which are also the most desirable.
Some of the neighborhoods on the outskirts of these desirable areas, or on the outskirts of those outskirts, are the second choice for many people who can’t afford the high rent elsewhere. People will begin to flock to these areas to be close to the action, turning a previously undesirable neighborhood into an emerging one.
Look for these neighborhoods and examine their qualities. Have trendy businesses popped up recently? Have lots of young people recently moved into the area? If so, you may have found a new emerging neighborhood.
Follow the Creators
Young creatives seek inexpensive neighborhoods close to exciting, hip areas. Rising rent prices in city centers and other popular downtown areas makes living in these areas impossible for recent college graduates, new artists, and other young creatives. Therefore, they seek the next best thing – a cheaper neighborhood close to where they want to be.
A neighborhood full of young creatives and recent college graduates is a sign that the area is about to experience a culture boom. These people can implement creative neighborhood projects, have expandable income to put into local businesses, and even begin to start their own initiatives. This will increase the area’s property value, thus increasing returns on investments.
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