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Migration’s Impact on Real Estate Investing

Published on Thursday - October 04, 2012

If you aren’t tracking population migration you could be setting your real estate investing business up for failure!

Almost 3.5 million people have left California in recent years according to the headlines this week. According to “The Great California Exodus” most of these individuals have headed to Texas, Washington, Nevada, Arizona, Oregon, Idaho, South Carolina, Georgia and Utah for cheaper living, a ‘better run government’ and a more business friendly environment.

Some have complained that unless you own a major stake in a big Silicon Valley tech company you don’t have a chance to buy a home or maintain a reasonable standard of living in California. Of course this is a bit of an exaggeration but something which real estate investing pros need to pay attention to. You can either be the Facebook, Google or Hollywood celebrity real estate pro who cashes in on this wealth or you can look elsewhere and potentially do more volume (and more work for less money).

It is also interesting to note that U.S. immigration as a whole is down. Even immigration from Mexico reportedly hit a net zero level back in 2010. While this should pick up with the economy other trends could balance this out, especially depending on which direction the election goes in. If we see a continued clamp down on high income earners and poor opportunities for top talent we’ll see a bigger exodus of businesses, entrepreneurs and tech geniuses out of the country.

We’ve already got Peter Thiel’s Blueseed project, entire private cities for entrepreneurs and real estate investing being planned in Honduras and even the likes of old Soviet countries like Estonia now boast more internet freedom than the U.S.

This certainly doesn’t mean an empty America but real estate investing pros should be thinking about how this could affect the demand for different types of U.S. real estate. Will it mean fewer demanding suburban McMansions, with more entrepreneurs simply jetting in to stay in smaller urban lofts for a few days to do business?

However, it is also important for real estate investors to avoid being misled by the media and sensational stats. The story of a Californian exodus may have some facts right but it has also been criticized for not painting the whole picture. Certainly tens of thousands of people still move to California each year and CA real estate is still amongst the most in demand in the world.

Want to be a wildly successful investor? Keep your eye on the big, long term picture so that changing trends don’t catch you off guard and crush your real estate investing business. You should profit from them and eat up the competition who hasn’t been paying attention.

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