Time for another fundamentalicious fact that drives the real estate investment industry (not to mention it affects the price of the house you’re living in right now).
This fundamental will increase the value of your property by historically 10% with ZERO extra effort from you!
So without further a due:
Economic Fundamental #4 – The Real Estate Ripple
When you think about the ripple effect it’s simple with some visuals. If you take a look at the picture below…
You’ll notice that in the centre is the bullz eye. That center is the heart of the economic boom, for example, Edmonton or Calgary. As you look at the circles surrounding the center, you’ll notice they expand and get larger. Within those circles are smaller satellite communities just on the outskirts of the city. As you move further away from the centre there are smaller cities and towns that surround the centre.
When there is an economic boom originating from the centre with cost of real estate and living spiking upwards then subsequently the surrounding areas will experience and increase in values but not at the same rate.
The time it takes for a surrounding community to experience an upward shift in prices could be months, even years, depending on how far away they are from the centre among other economic forces.
However…
If one city is experiencing massive economic growth and infrastructure improvements with increasing in migration, then the surrounding areas will eventually feel the stimulating effects.
This can be said for specific neighbourhoods as well. If you look around and notice a neighbourhood that is experiencing new housing or commercial development, ring road or infrastructure expansion, and the neighbours are in the process of some extensive renovations to their property than this is definitely an area to consider when buying a real estate investment property.
