Where are the best investment real estate locations? If you have enough experience investing in real estate, you can make money almost anywhere, but there are always places that are better or worse for real estate investments.  For maximum profits, you want places that have a better demand/supply ratio. You can use the questions below to find them.

Real Estate Demand

1. Job Growth

Does the area have decent job growth?  Ask local authorities and use census information.  Ideally, you want to see job growth equal to or exceeding population growth.  You also want areas with professional jobs moving in.  It is estimated that for every professional job created, there are four service jobs created, and all those employees need a place to live.

2. Population Growth

Is the population growing?  You can check the US Census figures online, or ask the local government if they have the statistics.  Stay away from areas that have little growth.

3. Quality of Life

Is there a decent quality of life?  It’s subjective, but important.  Are there theaters and bookstores?  Count coffee shops and cafes.  Trendy areas usually have increasing demand for housing.  It’s also a good indication of a high quality-of-life if people are willing to take lower-paying jobs just to live there.

4. Local Wealth

Is there wealth in the area?  It’s a good sign when there is some degree of wealth in a town.  Look for nice homes.  Wealth means everything doesn’t die when the economy slows.

Real Estate Supply

1. Number of Homes

How many homes are for sale?   Lower supply of homes for sale means upward pressure on prices.  This indirectly drives up rents as well, which makes for better investing.

2. New Construction

Is there new construction in the area?  Census figures can tell you what’s happened over the last ten years.  Check with the local authorities to see if the the number of housing units they’ve issued permits for is more or less than the expected population growth.

3. Rent & Vacancy Levels

What are the local rent and vacancy levels?  Rents have to be high enough, and vacancies low enough to justify investing.  When we first came to Tucson, every building had vacancies We saw a man holding a sign that read, “Apartment – $250 Per Month.”  A great place for renters, but not so great for landlords.

4. Buildable Land

What is the quantity of available land that is buildable?  Of course, less available land is better for future appreciation.  When the land runs out, the prices start accelerating upwards.

Conclusion

When you use these questions to compare various towns and cities, you’ll see the differences more clearly. You’ll have an idea about how housing demand compares to supply in each. This will help you pinpoint the best investment real estate locations.

Bill Manassero is the founder/top dog at the “Old Dawg’s REI Network,” a blog, newsletter and podcast for seniors and retirees that teaches the art of real estate investing.