When it comes to things which make real estate investors go weak at the knees the words “emerging market” rank pretty high. The thing with an emerging real estate market is that there is a true upward pressure to get things done fast and meet demand and that means moving properties fast, closing deals and making money.
Real estate investors love emerging markets because while they increase the pressures to get things done they also reduce the length of time it takes to close a deal to the minimum possible and that means more deals in shorter time than any other market before. This should immediately dispel the myth that emerging markets are ‘easy’. Whatever easy means here an emerging market requires just as much attention to detail and hard work put into a deal as any other real estate market.
So what makes it so attractive? Well, the very thing which I identified above: speed. Emerging markets have their own dynamic and their own way of doing things. Everything there works in a pressure cooker environment where you can make money fast provided you are good and if you are good you already know how to identify an emerging real estate market and get in there ahead of everybody else.
Here are the signs that give it away:
1. A pressure for development followed by a number of incentives. The pressure usually comes through local government and perhaps a change in the area’s industrial conditions (maybe a new industry has relocated there or started up). This is usually preceded or followed up, depending on the particular chain of events, by a number of incentives which range from tax-breaks to rebates and local financing.
2. A sudden populations surge. This is always the case as new potential property owners move into the area.
3. A surge in local development as real estate developers move in. Developers react to invitations and local market conditions. They are unlikely to come into an area unless it has started to develop and is beginning to show real potential.
Be on the lookout for these three signs. Do your homework and you will have found yourself an emerging real estate market. In the parlance of real estate investment this is the payload. You can make some real money real fast before other investors get in on the act but you have to do your homework, make sure you get in fast and limit your exposure because emerging markets always bottom out equally fast.
Provided you follow these tips you will soon find that your main concern will be what to do with the time you have on your hands and the money you have made.