Exodus from the cities to the burbs – farther out from city is now more risky for investors, it’s over built and the rise in gas prices has deterred many renters and buyers.
There are advantages for living in the suburbs, you can buy a cheaper residence, and the costs of consumer goods (coffee, dry cleaning, food) are usually much lower than in the city, but increasingly, the privacy and space advantages have lost their appeal if it costs you $5 a gallon to get there and takes you an hour to complete your commute.
Moreover, there’s been lots of talk these days about the end of the suburbs general. More and more homeowners in the suburbs are moving back into the city due to the high cost of gasoline. Right now, in the current real estate market crash, the hardest hit housing markets are those on the very edges of the city, where there is just less infrastructure and as oil prices continues to rise, the desirability of these areas continues to sink.
And it’s not just gas prices it’s parking as well, which isn’t cheap in some cities. There are people who not only have just moved from the suburbs to the city but left their cars in the country as well, and get around on a bike and use public transportation.
If the edge of the suburbs isn't attractive to renters then the edge of the city will be. So you can expect to generate cash flow from a property that's an hour outside the city center.
But what is an investor to take away from this? Well those apartments near the city are looking more desirable these days and rents will go up as demand increases. Overall though, when buying any investment property, it’s good to factor all of this in from the start. Who are the tenants you are seeking? Where will they work? How will they get to work? What schools will there kids go to?
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