What are factors to look at for properties/locations with the best appreciation?

Question

I'm trying to focus on properties that appreciate.  What factors are best to look at to determine if a property will appreciate the most?  Any advice?

Min Zhang · Answer

Hi Derek, my recommendation is for you to look for areas with job growth and upcoming developments. These tend to drive property appreciation. Columbus is one example of appreciation market. Intel is building $20 billion plant here, Google is building data centers, and Amazon and Meta are buying hundreds of acres of land. Don't hesitate to ask if you need anything!

Samuel Diouf · Answer

If you want appreciation, identify markets with expanding industries, positive growth trends, and bright economic forecasts.

Columbus, Ohio is a great market to consider if you're leaning towards that appreciation! I moved here from Florida after seeing the projected growth. Multiple, billion dollar companies are investing heavy in our area, such as Intel, Google, and Amazon. Which will bring plenty of other investors and general business to the area.

Steve K. · Answer

You're smart to focus on properties that appreciate because that is where the real money is in real estate IME. Some good answers here so far but one I haven't seen yet is desirability. With many jobs being remote these days, people have more choice in where they want to live as opposed to where they need to live. Markets that are desirable places to live (beautiful, good weather, affordable, less populated) have outpaced other markets in recent years.

Another factor not to overlook is historical appreciation. If a market has been flat for the last 50 years, that's a pretty good indication it will remain flat. If it has gone up and down rapidly, then that indicates a boom/bust market (typical in areas without a diverse job market such as areas where all of the jobs are in tech, energy, manufacturing, a single employer or supporting those workers for example).

The market I invest in has had amazing and consistent historical appreciation averaging ~10%/year going back to 1980 and didn't even go down during 2008-2010. Prices actually went up during those years 2-3% while many other markets crashed 50%. This was due to desirability, affordability, limited supply due to geography and laws protecting open space coupled with very high demand due to net in-migration of high-earners/wealthy people, and perhaps most importantly a diverse job market in recession-proof sectors like education, government, defense, healthcare, etc. not just tech, energy or manufacturing that can be boom/bust.

Anthony L Amos Jr · Answer

Job and population growth are some of the biggest factors for appreciation.

Bradley Buxton · Answer

@Derrek J Hooyman

Look at the median home price data and rental data at the city level or zip code level. Even if you are looking at buying multifamily all housing is connected. You might have to buy this data but usually the median home price is public information.  If you're considering multiple markets look at the apartment and SFH inventory, starts, and vacancy rates.  A place like Austin, TX has been over built and rents are going down and vacancy rates are going up vs. a small market like Reno, NV the rents are increasing because of a lack of supply and driving appreciation and prices up.

Jimmy Lieu · Answer

Hi Derrek! The best factor to consider is the macroeconomics of the area. Look into locations where major companies are building and developing because it will drive job growth and population growth. That is true here in Columbus OH because companies like Intel, Google, Facebook, Amazon, etc are all moving out here. Happy to connect and answer any questions you may have!

Marc Winter · Answer

Look at the school district--the higher rated the district, the better for holding value and stickiness of tenants, plus appreciation over time.

Secondly, you'll want to make sure there is a net in-migration of working and professional folks to keep the local economy perking along.

Good luck, keep investing and moving forward!

What are factors to look at for properties/locations with the best appreciation?

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