Investing in a real estate location may seem obvious when all you have to do to garner the most amount of profit is by investing in major cities. However, the idea itself is hardly practical as although properties in major metropolitan areas often yield the highest return, purchasing and even maintaining it can be a real challenge. There’s also the fact that you’ll have so many more competitions ready to offer a better price compared to yours.
Despite all of those facts, major cities remain to be a highly profitable location for real estate investment. However, simply leaning onto investing in those areas won’t give you a chance to learn about creating opportunities, and learning when there is one. There are a set of complex factors that make a location a good place for investment. Those factors go beyond a mere number of population or population growth. There is a question of sustainability especially in the entirety of the economic sector of a location. And the issue of economic diversity is not something that all areas possess, nor seemed to develop in.
What is economic diversity?
Although locations that focus on a single or a few industries can very well thrive,
Places with a high economic diversity is on a level of their own. Economic diversification both stimulates positive economic growth and is a result of economic growth in itself. Some of the most common one-industry that dominate an area or a state are the industries of tourism and the oil and gas industry. These regions have one dominating industry likely because of a geographic factor. But more often than not, it is because of the combined geopolitical factors that make the industry of an area what it is today.
Growth across a wide range of sectors
The economic growth can be seen largely through the growth of employment rates and employment growth. In an economically diverse area, this is further re-defined as growth across a wide range of sectors. In a way, this is somewhat interlinked to the population growth as well. The population growth is generally linked to the growth of the market itself. With more jobs and industries available, the more people will come to the city, which contributes to both employment rates and population growth. This plays a vital role in the returns of the real estate investment.
Effects of economic diversity in property prices
It’s no secret that the places with the highest economic diversity yields the highest in terms of prices among other areas. It’s one of the most important factors that contributed to the thriving of the capital cities of many countries. Based on the report presented in Emerging Real Estate Trends 2019, it’s been said that Dallas Fort Worth is considered as one of the top markets in the United States. This is determined through a few prospects related to real estate such as the millennial and generation Z workforces. It’s also worth noting that there had been a rather big activities in startups. These data are acquired from a range of industries and not simply locked to one dominating industry.