Demographic changes and demographic trends influence almost all decisions of modern life, from urban planning to healthcare, from education needs to lifestyle, these demographic factors and others determine the shape of our society and the growth of urban or suburban life. Take the example of a real estate investor whose livelihood depends on a change of house or job. Economic mobility is a key determinant of the future of this business, as are the economic health of the region, jobs and the region’s amenities for singles or families. The recent weather events that impacted the United States will also be a shift in the short and long term demographics or in the urban area.
Development planning relies even more on demographics to determine priorities. The average age of the population is a major factor in the type of housing that will be needed over the next two decades. In addition to the influx of immigrants or evacuation victims, hurricanes (Harvey, Erma, Maria) are forming in large urban areas which provide employment opportunities and supportive families. This can be a temporary need or if families are relocating to the area, a permanent change of address and an opportunity to increase rents due to high demand. The inventory and demand in these areas could be an untapped opportunity.
For investors, the stakes are just as high. Investing in commercial real estate requires the ability to predict where there will be a growing population and where the average income of the population will rise under pressure on housing. Investors are best prepared to watch the news, see changes due to weather conditions or unpredictable changes in the environment, and see the business that unfolds in the United States.
In fact, commercial real estate investing requires a deeper understanding of demographics; it is not only demographic trends that need to be considered, but the demographics of competition, the business climate and climate change. Road traffic patterns can also make or break an investment, especially near busy intersections in competitive markets.
Traffic demographics can add to the complexity of making a commercial real estate investment. Considering the high stakes in real estate investing, whether in residential or commercial rental properties, demographics reports and market segmentation data are even more important. Can you start buying land or buildings right now at a reasonable market price while waiting for demand to build? I believe so, you can. In fact, there are good properties on the market today that offer good returns (ROI) under current conditions. The demand for displaced workers and residents may only be six months away. Take advantage of this opportunity and diversify your portfolio by working with a good real estate broker.