After yesterday’s post that completed the explanation of “Fat Bear” strategies, you should understand why Real Estate is such a powerful creator of wealth.
But, can you identify the key thing you need to make it work?
Like any business, real estate needs paying customers to sustain it, ie. tenants.
So how do you know where the tenants will be?
The answer lies in the following formula, developed by the Real Estate Investment Network, through over 20 years of research.
We can accurately predict that: Gross Domestic Product(G.D.P.). growth leads to Jobs, and in about 12 months, Population growth(in migration) to fill the jobs. More people means higher demand on rental inventory and higher Rents, as most people rent for the first couple years when moving to an area. About 18 months after G.D.P. growth, the increase in Rental Demand puts upward pressure on Property purchase demand and finally on prices.
If you buy only in areas where G.D.P. is growing, you will always have tenants to rent to, who later become buyers.
Both are good for your real estate business!
Check back for the next post to learn why Canada is a safe haven in the global economy and where Canadian G.D.P. is growing!
Until next time,