How do you predict emerging markets?

[Ryan Johnson]

I am buying a place on the west coast as a short term rental(cash flow focused) but the more I look into it the more I believe there is significant potential appreciation. This town is isolated from others and severely underpriced compared to it's west coast neighbors. I think the draw of inexpensive living coupled with lots of sunshine and available recreation could draw a big crowd from California retirees. It has a mildly bad reputation but I find it to be mostly hype. How can I differentiate between a town with potential and one that will remain behind the curve? Does it come down to industry/jobs/growth?

[Bob Okenwa]

@Ryan Johnson

Gotcha. It's hard to revitalize a town that has seen better days. The Salton Sea was once a hotspot in the 50s and 60s and was a wasteland by the 70s.

There are lots of places in America with lower costs of living, but they don't appeal to people because there isn't a an economical reason to go there. With recreational destinations, it helps to have an infrastructure that can serve tourists. Places like Myrtle Beach, Jackson Hole, and other tourist destinations have the catch of being nice places to visit aesthetically, filling a niche (beach, skiing) and are filled with local shops and a hospitality industry that can accommodate tons of visitors.