Real Estate; Knowing When To Get In, When To Get Out, and Where
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Real Estate; Knowing When To Get In, When To Get Out, and Where

Advice on how to make money by investing in real estate focusing on the most important factors of location and timing of investment, using an actual example, (though masking its name) to clarify the right times to come in and the right time to go out to maximize profit. Doing research on trends is crucial so as not to enter too early or leave too late.

To make money in real estate requires two specific factors; Where and When.

By Where, I mean the all important location.  It isn't what a premises looks like it is where the premises is located which not merely sets price but saleability.  The most beautiful house in an undesirable area is worth the same as a hovel.   The most badly designed house in a desirable area is worth as much as a mansion; because of the all important location.

By When, I mean the time one gets in and gets out.  This is extremely crucial.   Getting in too early means a long wait between buy and sell and might force the purchaser to sell short or face bankruptcy.  Getting in too late means one pays more than the property is worth.

I am using a particular large development in Brooklyn as an example.  For the purposes of this article I will call it Veerland.  Veerland was built just after World War II for returning G.I.s.  There were many one and two bedroom units, and it was cleverly interwoven that the apartments fit together like a jigsaw puzzle in these six storied buildings. 

Electricity and water and gas were part of the rent and the buildings filled up very quickly with aspiring middle class families. There were Courtyards between the buildings, a large empty lot on which a public school and playground were built.  The subway was in walking distant, there were buses in easy reach.  There was a business district and it was a virtual no crime area.

By the 1960s due to the fact that many of the original residents could afford to buy their own homes the apartments became vacant. As the buildings were rent controlled the vacancies were filled by non-aspiring lower class.  More residents moved out and by the 1970s it was thought to be a 'Project' (a term for low income closely packed housing units)'

By the 1990s it was on it's way to becoming the heart of gang activity and a police post had to be erected.

Then, somehow a developer stepped in and turned it all around.

Although knocking it down had been mooted, the fact the buildings were structurally sound meant all that needed to be done was cosmetic rennovation.  Clearing out the tenants during this period and changing a few provisions underwhich it had been established, plus a new name was all that was required.  

Despite the cost, the fact was that this part of Brooklyn was experiencing a renewal was perceived by the new buyers.  They got in at the right time and Norand Gardens became a prestigious address.

How did they know?

They knew because they caught the trends, they saw areas around Vanderland becoming more popular, that people were taking note of the ease of transportation, the walking distance of every kind of amenity, and that all that was needed to do with the apartments was the slightest renovation to package them as middle class.

Recognising the location, seizing the time, they were able to turn a great profit on buildings that had been written off as 'slum' for almost thirty years.

If you are considering investment in real estate, study your location carefully, find the minuses and pluses and get a bit of history.  See how the population is moving;  there are times, as in the 1960s when people were going to Long Island in droves, then, in the late 90s and 00s returning to the city.

Try to be somewhat at the front of the trend, but not too far from the pack. 

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Comments (2)

Excellent article.

Thank you Martin