If you’re trusting the real estate market with your money, you’ve got to understand the local and regional conditions you’re investing in. Start by taking a moment to get to know the basic types of markets in the US.
Characterised by a ‘flat’ growth curve, linear markets tend to enjoy steady growth with no major highs or lows. If you’re looking to flip, then you’ll need to find a refurb property to make your gains, but sit tight and hold onto your investments and you’re likely to get some of the best returns on the market. This type of market is commonly found in the Middle-American heartland, as well as some of the southern and southeastern states.
These markets are the direct opposite of linear – and you’ll be in for the ride of your life. Found along the US coasts, property prices can change fast – we’re talking ‘boom and bust’ on a grand scale. When times are good, flipping can bring big rewards, but judge it wrong and you’ll have to hold onto your property for years before you can make a profit – each cycle lasts for between 7 and 10 years.
Some markets, like Florida and Illinois, never quite boom – or bust – but are characterised by slow growth followed by moderate periods of cycling. Properties that need a lot of work or can be developed might suit a quick turnaround, but in general it’s usually better to go with a buy and hold strategy.
Now you can match the type of investment you’re looking for with the right market – get ready to start reaping the rewards of real estate investments.