How Mark Hanrahan Cuts Through the Noise to Select the Best Areas for Investment
Having property may seem like a rite of passage to success, but the path to success is not ownership; it is development. Developing real estate takes creativity and purpose. Looking at real estate and developing it unites artistry, considers atmosphere and is driven by vision. Mark Hanrahan, co-founder and co-owner of Markmel Co., located in Urbandale, Iowa, is the ultimate expert in real estate investment and advises people on making the best choices in choosing property. Here are some of his tips:
1. Understand the Importance of Demographics
Understanding the demographics of the location is important. Having real estate near a young workforce may increase the property value because a young workforce means more opportunities for businesses to take advantage of the labor. Having an area where wages increase is very important to consider because it means that people are investing more in the area and an area with high wages give a great opportunity for growth. When there is population growth due to business opportunities in the area, property value may increase because there would be higher demand from people that may want to commute less from home to work.
Understanding the demographics can also help determine what type of property that one would like to develop. If one is trying to develop land to attract millennials, choosing a property that is close to public transportation or the college campus may be very important. If one is trying to attract families, the developer may want to consider an area that is more suburban with good schools, safe parks, and low crime. If one is trying to develop land for retirement communities, the investor may seem like they would need to invest in places that are close to shops but far away from the busyness of a downtown city.
2. Understand the Importance of Location
It is important to understand the phrase “location, location, and location.” Having the right location is considering the right area that would help the property appreciate. Choosing a property in an area where crime is low can be a wise decision because if the land is developed to include a house or a business, choosing real estate in an area of low crime may attract people to later buy or rent the property. With the onslaught of recent natural disasters, considering location is very important. If the area has a high chance of experiencing a natural disaster, realize that any real estate investment can be tragically swept away. Safety is not a concept that should be applied only to people; safety from natural disasters means protection for investment.
3. Understand the Importance of Quality
When considering real estate development, it is integral to look around at the surrounding properties. If the surrounding properties look like there is significant aging with run-down buildings, the real estate that is to be developed may not be a good consideration to develop. Run-down buildings mean that people are not investing in the area. One is not helping themselves by expecting growth in an area where there is no growth. Yes, the property may be cheap, but it is cheap for a reason. Building the newest building in the area runs the risk of a depreciating building because prospects looking to live in that area would not want to buy the most expensive building in that area.
4. Understand the Importance of Timing
One must realize that timing can help or hurt. Developing rental property in an economy where people are more prone to buy houses can run a risk of having empty apartments. Understanding if the market is in a recession may be a good time to buy expensive properties for cheap. If the investor is planning to move one day, he has to consider if his house is sellable by the time he wants to move. Asking an expert such as Mark Hanrahan can help in deciding when to invest.
In closing, buying property and developing it is an American Dream, but this dream can turn into a nightmare if important things are not considered. To encourage the American Dream, consider these steps first and get a consultation from someone like Mark Hanrahan so that the best decision can be made for an optimal outcome.
