Why Jobs Matter to Apartment Investors

Posted on Mar 23 2015 - 3:22pm by Lance Edwards

Want to know why jobs matter when selecting a market for your apartment deals? Before you even begin searching, learn from real estate entrepreneur Lance Edwards why the potential for job growth and a strong local economy are the chief factors you need to look at when deciding on your first apartment market.

See Also: 5 Ways to Identify a Hot Market for Apartment Wholesaling

What drives a market from the macro standpoint? At the end of the day, the main thing that is important for the apartment market is job growth. Job growth translates into rental demand, rental demand translates into growth in occupancy.

When you buy and hold property, there are two things that can help increase your cash flow: market appreciation and forced appreciation. Forced appreciation is where you are making improvements through better management to
raise the market value. But market appreciation is when economic forces outside of us are driving the values up. That’s a good thing. Forced appreciation, we have control of, but market appreciation we don’t.

When we hear about outside investors from Canada and Russia coming into the states to buy up apartments, what areas are they landing in? They are landing in the areas with the best job growth potential.

I have had calls from Canadians and Russians looking to find properties across the country. If I had a choice between buying a property in Houston, Texas or buying and holding a property in Detroit, Michigan, which one would you pick? Of course, we’re going to pick Houston, because there is a rising tide. Rising rides float all boats.