The 2023 VestMap Population Report, Part 3

In part one we looked at the the zip codes that had the highest forecasted population growth. In part two, we looked at the relationship between population growth and median housing prices over time.

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The data shows clearly that investing in areas of high population growth results in returns far above average for real estate investors.

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As an investor, if you could go back in time and buy in those growing areas, today your overall returns would be phenomenal.

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The reason for this is simple: real estate prices are very sensitive to macroeconomic conditions, just look at what is happening with interest rates. These types of cycles are basically impossible to predict with any level of accuracy - if you could do so reliably you would be very wealthy.

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So, if market conditions are not a good way of predicting the future, what is?

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Answer: the fundamental conditions that affect supply and demand: long term desirability, population growth and economic development.

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These factors are well-understood and forecast with great accuracy over the long term and can help real estate investors maximize their returns. Here are the major factors that affect long-term investments that investors need to take into account on every prospective investment:

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Demographics: who lives there and what do they do?

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Income: how much money do they make? Can they afford my rents?

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Schools: do you rent to families? If so, good schools drive demand.

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Crime: How safe is this neighborhoood? Is it getting safer or worse?

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Population Growth: Is it a growing area? How fast is it changing?

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Rent: is the rent high enough to make this investment work?

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Nearby POI: What’s around this property? Are there stores nearby?

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These factors help inventors put a different lens on a location, and evaluate a market not based on what the prices are today, but rather what they could be 10 years from now based on market fundamentals.

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Start increasing your returns today with VestMap.

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