Trends..

Since joining this forum, I have been looking at apartments after reading up on everyone's posts and the success stories. I have bought and read the recommended books, and now starting to look at other information as I try and formulate my own plan to move forward..

I am now noticing stories and anecdotal things that I would have bypassed a lot before, here's an example:

http://money.cnn.com/2008/06/16/news...ving/index.htm

I would think that would be a good sign for metro area commercial properties, and just more evidence to keep in mind when looking at areas or trends..

What other trends do you look for, and where?

I know you can't make business decisions on just these types of stories, but wonder if they start to point out the beginning of certain trends that may be on the horizon....

I follow this type of information closely. I use it to help craft my investment strategy, but obviously its not my sole variable.

I think location is important. In phoenix, you saw everyone run out to buy cheap new homes on the outskirts of civilization. After a year of 50 mile commutes, people start to realize "WTH did I do that for?" They gravitate back to city centers where jobs and shopping are close. Gas prices only help that.

For the class of apartment buildings I looks for, it is a big plus for them to be close to employment and daily needs (groceries, schools, etc.). The area I am focusing on (and have already acquired) is experiencing a 6% increase in rents this year. I believe transportation costs, among other things, are contributing to this.

I would also ask to the jedi-master, SteveO, for his take.

I read this story already and felt the same way you did. It may take a while for the complete transformation to occur. So many people have houses that won't sell right now.

The immediate impact is those that are losing their houses on the outskirts. The next few years should be favorable to us as well.

I have always exercised caution around buying apartment buildings on the fringe of a city. There are many people that do this successfully. It just seems like the risk can be higher.

Large developments of apartments could come online. This could lead to huge area specific vacancy rates.

Properties in the heart of a city can be cost prohibitive though. If a deal is selling for land value that takes it above the cap rate value, the game is changed.

Thanks for posting this article and your thoughts. Rep +

You mentioned a very important trend.
Proximity to work place and access to public transportation are key in major metropolitan cities as well. Not everybody drives in big cities, and that is even more critical during $4/gal gas days.

There are other trends that I pay attention to:
- Migration trends: Most people are moving to sunbelt states. Even though most of the cities in the sunbelt are suffering RE-related issues, people still keep looking for hotter weather.
- Proximity to good healt care centers
- Healthier lifestyles (people want easy access to places where they can exercise, jog, run, play sports, yoga, etc)