In the true spirit of bringing a fresh perspective to the real estate industry, which has long since been set in its ways by way of how things operate traditionally, I’m going to throw a bit of spanner in the works and discuss a different approach to the valuation of property. I mean if you’ve been on a house-hunt guided by a real estate agent before, or indeed if you’ve witnessed one perhaps by watching a reality TV show like House Hunters International, you’ll notice that the estate agents tend to highlight a set of similar general pointers in justifying the price of the property.
A sea view for example seems to be a much-coveted feature of any property located within the vicinity of the ocean and for some reason that sea view adds value to the property in question. I can go on and on about many other features, like some of the obvious ones which would include the size of the house, the location in relation to public infrastructure and other amenities, etc.
Some of these are very legitimate and logical reasons for the value of a property to be set around a certain point, but if one takes that time to look at it from a little bit of a different point of view then some great business ideas emerge as a result. Suddenly the real estate industry is revealed not to be one which operates in isolation and a whole new world of opportunities awaits those willing to pursue it.
The relativity of property value
There’s no doubt about the fact that the value of property is relative, but typically that relativity exists in somewhat of a bubble in which indicators such as supply-and-demand effectively dictate the pricing. Looking at the relativity from the point of view of servicing specific markets on the other hand is where all the opportunity lies.
Let’s say you found yourself in a relatively remote town that’s super quiet, but has all the amenities anyone could ever ask for to consolidate on the quality of their lives. You have a good amount of capital to your name, so you could otherwise have bought some properties in that oh-so-quiet area and generated cash-flow by renting them out or by flipping them outright.
Except there’s one problem – although the properties are cheap and are in a great area many people would otherwise love to live, there isn’t much in the way of economic activity, so you’re warned that you’ll have a hard time getting tenants and/or buyers.
Now, if you look at it from beyond the typical property valuation parameters you’d realise that there is still plenty of opportunity. Organisations such as United Engery Workers Healthcare help nuclear weapons workers who were made ill by work done in the US nuclear weapons industry get compensation and since those are likely some elderly people, guess where the perfect place for them would be to perhaps settle post-compensation, to enjoy a quieter life of retirement…
It’s these places where the property prices are low because of the slow market due to limited economic activity, isn’t it? You could also target digital nomads since they only need the internet to work, etc…Look at it from a little bit of a different point of view.