The list of best places for business and careers according to Forbes' is out and it's not surprising that California fared poorly, ranking as the most expensive state.
However, 10 other areas top the list for best places to set up shop.
- Boise, Idaho
- Raleigh-Durham, North Carolina
- Austin, Texas
- Washington, D.C.
- Albuquerque, New Mexico
- Huntsville, Alabama
- Fayetteville, Arkansas
- Norfolk, Virginia
- Atlanta, Georgia
- Madison, Wisconsin
The list was compiled using research from Economy.com , a firm based in West Chester, Pennsylvania. It compared labor and living costs as well as assessed workforce education levels, job and income growth and migration patterns. Crime rate and culture-and-leisure trends were also examined.
Many people interested in investing real estate follow market rankings like the Forbes Best Places for Business list, but Lisa Vander founder of Pacific Blue Investments in Solana Beach, Calif. said you should also consider six key steps before you make a decision on investing in other areas that might be outside your home state.
Vander lays out the steps in her upcoming book, The Real Guide to Making Millions Through Real Estate Investing, due out this year. Here's a preview of them.
- Step one: Determine why you are investing in another area. Vander writes that there are several reasons why you might choose to invest outside of your home state, including greater appreciation, steady cash flow and return on equity, or lower down payments.
- Step two: Evaluate regional trends and investment patterns. "Real estate growth and values are affected by regional trends. This means that a region of the country will typically experience real estate booms and busts at the same time. More specifically, when one city has lay offs or increased unemployment, then the surrounding cities in that region will be impacted by a corresponding decrease in real estate values. Make sure you take a look at the local economy of the area you are considering," writes Vander.
- Step three: Investigate municipalities. Vander tells her readers to take a fieldtrip to the area that they plan to invest in and ask lots of questions of the elected officials. She also advises readers to take a look at zoning maps to see if there are solid plans for good public transportation, schools, freeways, and parks.
- Step four: Investigating real estate markets. Vander advises investors to take a look at how much inventory is on the market, pricing, and vacancy rates. She tells investors to be conservative when considering appreciation expectations, "I advise my clients to use appreciation rates of 2 percent to 4 percent per year. This way, if the market outperforms that year you will be pleasantly surprised. In contrast, by using numbers that are unrealistic or too aggressive, you will be disappointed when your expectations are not met and might be tempted to jump out of the market too soon."
- Step five: Area research. Take a trip to the area and look for things such as "for lease" signs in strip malls -- these can be gauges for how the economy is doing. Vander recommends talking with as many people in the area as possible so that you have a solid understanding of how people feel about the area. Visit new home sites to see who is coming into the area, drive through resale neighborhoods, and check out the community colleges and parks.
- Step six: Investigate property managers. Vander calls this step the most crucial. Make sure you bring on board an experienced, knowledgeable property management firm that can keep you up-to-date on how your asset is performing.
