Where To Find Real Estate Gold Mines
Many people wonder how some investors seem to strike it rich in real estate,
while others just manage to get by or end up losing money. Much of it has to do
with both when and where they buy property. How does an investor know this?
Certainly there are price cycles where the average value of real estate goes up
and down, but then there are always areas that seem to skyrocket past the
averages.
One secret is to find out where the city planning department is rezoning land for different uses, or developers have started building in an area that previously didn't have much development. A few good examples of this appear in the Free Articles section of our website.
One of the most famous examples is Lebreton Flats. In the past, this expanse
of land was simply "brown fields", an area that contained just grass and brush.
Now, a developer is planning a combination residential/commercial development,
providing jobs and homes close to downtown.
Another example is an area of land near Mooney's Bay that juts into the Rideau
River. This land has recently been sold to a developer who is planning on create
the next 'Rockcliffe' (for those of you who don't know Ottawa, Rockcliffe is a
very rich area of the city).
A final example is the former Canadian Forces Base Rockcliffe, which is being
sold by Department of National Defence. This land is slated for large scale
redevelopment and is twice the size of Lebreton Flats.
So why does all this redevelopment and rezoning matter? Because there is
almost always a ripple effect in housing prices. The ripple starts at the centre
of the development and moves outwards, having a lesser effect on prices at
farther distances.
For example, if rich housing is developed on the land near Mooney's Bay, the
prices for nearby existing housing will probably go up in value, but house
prices on the outskirts of Ottawa will not be affected. When the Lebreton Flats
development is finished, there will be a definite rise is nearby housing prices
because now there will be retail and commercial services nearby, making the area
more desirable.
Our friend Dr. Anil Mody tells a story in his book "How To Make Millions
Without a Cent In Your Pocket" about how he heard of a new hospital being built,
so he bought housing nearby the development before it was finished. As a result,
he made quite the profit from his investment.
Once you've determined an area that will be developed, buy property near the
development before it's finished. More often than not, you will
be miles ahead of the investor who just picks an area and buys property 'hoping'
it will go up in value over the long term.
This article is copyright © 2004-2010 Spirepoint Properties. All rights reserved.
Paul Blacquiere and Joanne Beehler are full time real estate investors and have been investing in Ottawa, Ontario, Canada since 2002. They are owners of Spirepoint Properties, a Canadian real estate investing company dedicated to making real estate investing easy.
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