Where do you prefer to invest at? the urban areas, suburban areas ect. and why?

There is plenty of money to be made in my rural hometown. Prices have steadily appreciated over the past few months.

Investing in urban areas would be better due to infrastructure and businesses around them. But anything can be consider a good investment if it is good value. Everything is relative.

Watch out for plummeting property values in some areas, though - I'd say generalisations here aren't going to be anywhere near as helpful as considered research into any local market conditions.2c.

I would agree with you Brian. There are areas where I live that property would be a great investment especially in certain areas but in others it would be a terrible investment. I would agree that you just need to look at your area and do some research.

Yes, you should always reasearch any area before you invest. Here is Salt Lake City the government encourages new business growth with incentives etc. Pick an area where the leadership is committed to new business growth and when employment is also growing and look at the wages.
Many times it may require both spouses to work and then look at their income options. To extensive to cover all aspects here.

I only invest in commercial real estate and development. I stay away from family homes, etc. A group of us are thinking about investing in a retirement community, which would involve condominiums, but we're still working on the numbers.

As far as location, I prefer to look at underdeveloped areas that are growing quickly. People only go where the jobs/services are, so you can many times anticipate surges in commercial property, and get a better price. The more money we save on the property, the more we can put into development.

I've been looking into this but it seems like I would need to make it a full-time job to justify setting it up in my area (lots of new growth + land for sale)

Yeah Mark, it definitely is a full-time job... one of my best friends is involved and his father is retired and always looking for something to do. So we put him to work.

There is a lot of risk involved, and it's no get-rich-quick strategy. In fact, it is a very slow process because you have to anticipate where the growth areas are going to be years in advance. So you hold property that barely appreciates for a long time, until finally things start moving in a positive direction. Once the land really starts taking off (appreciates in value), you have significant equity to tap into in order to help finance its development.

But if you get in during the wrong market, you'll overpay for the land and unless you have money to develop the land, you'll be screwed. Hence the anticipation.

For example, many developers were buying up real estate dirt cheap in New Orleans after Katrina (they still are, actually). Now, it will be quite a few years before this land *may* be developed, so it is a long-term investment. They could end up holding this land for decades. If we continue to have rising water levels, their investment could become worthless.

Real estate is not as lucrative as people think. It really takes number crunching, shrewd dealing, and an eye for value. Even then, a market move (like what's happening now) can derail your investment very quickly, and if you are highly leveraged (read: mortgages), you may be taking significant risk. All for a return that is competitive with the stock market.

Real estate investing should be "part" of your portfolio, but it should never, ever be your entire portfolio.

Thanks for this advice!

What about areas that they are trying to revitilize? Are those areas a good investment? I am just afraid that the area will never grow they way they planned or what it to.

That depends, if there is still a lot of traffic through there, or if they are revitalizing by tearing down old buildings and putting up new ones then it will probably do pretty well. The bank I work at now used to have a waterpark 4 years ago on the same piece of ground.

Yes, there is quite a bit of traffic. So far there has not been alot of actual tearing down of buildings but from my understanding they are supposed to get rid of some of the unsightly ones and rework the ones that just need an update.

If you are not in on the plans, and haven't seen sketches, I'd be patient and wait.

Revitilization is rather risky. You are talking about an area that may have a negative reputation, and cleaning it up will not solve the problem. Sometimes these areas get cleaned up but the residents end up trashing the place.

Dig deep. Do the research. Be a serious negotiator to hedge any risk. Understand the people (are they poverty-level, middle-income?) and are they going to move? Are good people going to move in? Are these the type of people who pay rent consistently? Are there good schools nearby? Is there a good job source (e.g. large company) nearby where people would like to live close to work? Are their parks, golf courses, nice restaurants, shopping malls, etc. nearby?

There is no clear cut answer. You have to do the research and understand your risks. I'd talk to several commercial and residential real estate agents to get their opinion. Just know what you are getting into.

Lastly, do not invest money into real estate that you may need within the next 10 years (at least). Yes, I said *10* years. You need to be able to sell/rent on *your* terms, not someone else's. You cannot do this if there are time constraints (e.g. if you are retiring in 5 years and will need to sell).

Chris

....Ok..