The Number 1 Reason Why The New President Can’t Affect Your Investing
I’m sure you’re sick of hearing about this upcoming election. I know I am! For over a year the presidential candidates have dominated our news and invaded every aspect of our lives. But they shouldn’t! At the end of the day, it doesn’t matter who is sitting in the White House. Unless you own 1600 Pennsylvania Avenue (and if you do, why are you reading this blog?) the outcome of the election shouldn’t affect your decision to invest in the real estate business. You are the captain of your own ship, not Hillary, not Donald. Don’t let either politician ruin your dreams of investing for a nice extra income or even becoming a property mogul. Ignore the news, forget about the debates, and concentrate instead on your micro market real estate investment. The key word here is “your”. This is your business, your dream. You are the number one reason why the new president cannot affect your real estate investing.
Firstly, let’s go over the difference between the Micro Market and the Macro Market when it comes to real estate and explain why the Micro Market is where you need to be focusing your attention, both before and after November 8th.
The Micro Market:
- Is local! – whether that means a single street, a neighborhood, a subdivision, a region of a city or even state, studying the micro market helps you to identify areas with good investment potential. By concentrating your real estate business in a specific area on which you’ve carried out extensive research, you’re achieving laser precision focus on your micro market and can adapt your strategy as and when changes in the market take place.
- Targets a specific audience – when buying a house, you’ll need to think about who will live there and what can they afford to pay, either in monthly rent or to buy outright. Smart micro marketers advertise in the right areas to reach the right people, ensuring your business thrives. You’ll also need to consider potential impacts on your target audience (e.g. ease of getting a mortgage, employment opportunities) and how it will affect your business at any given time.
- Tailors itself to consumer needs – schools, jobs, local amenities are all important areas to research when looking at potential property purchases. Whether you’re targeting students, young professions, families, or retired couples, conduct detailed research to discover what each demographic is going to be looking for when it comes to their new property and then invest accordingly.
The Macro Market:
- Is big – really big. Global, in fact. You need to be aware of macro factors when it comes to the real estate market. Population growth or movement, wage or employment increases, construction costs, and, let’s face it, government policies all affect the market on a national and international scale. Whilst your real estate business may not span a wide geographical area, the impact of the macro market needs to be taken into consideration. The global housing crisis in 2008, for example, not only affected the USA but also Europe. But don’t worry, the housing market is in a much stronger position now than it was then – your investment is safe!
- Focuses on the market as a whole, not a specific customer base – and whilst it can affect the micro market, the trends visible in the macro market are not a blanket guarantee. For example, a rise in housing prices in LA probably won’t be reflected in the property market in Ohio and a dip in employment levels in Texas won’t affect the rent cost in New York City. It’s important to be aware of the macro market, but don’t let it affect your business decisions. For guidance on how and where to invest in your own chosen area, you need to direct your attention to the micro market.
Although it’s crucial to understand overall market trends, I think that the most important thing is that you should focus your attention on Micro Market Real Estate Investing. As a real estate investor, your business always targets the micro market – you are going to be renting out or selling your property to people wanting to move into a specific area, with specific amenities, at a specific time. So even if you’re active all over the country, your business will always focus on the micro market. This means you need to move and adapt with the demand of your own area’s micro market. Unless your client is Hillary Clinton or Donald Trump, potential customers are unlikely to be immediately affected by the election outcome. They’re still going to want to move, they’re still going to want to live within your market area, all you need to do is ensure you have the right property for them.
Micro Marketing allows you to target your customers (whether those are tenants, buyers or commercial lease holders) and match your property investments to their demands. So if, after the election, those demands shift, your business should reflect that. Just like at any other time when the market changes, if there’s a higher call for affordable apartments or an increase in demand for family homes, strengthen your property portfolio to service your customers as best you can. So yes, the new president may have an impact on where or how you invest in real estate, but the point is that the election shouldn’t stop you investing! All you need to do is be well-informed, do your research, and commit to your business.
No one knows exactly what will happen on November 8th, nor in the weeks, months, years that follow. But with careful consideration of both the micro and the macro real estate market, you can still make a success out of your business. You just need to adapt to whatever happens in the White House after the election. Don’t allow whoever finds themselves in that oval office to dictate how you run your real estate business. Be flexible, be clever, and work within the current market to achieve the best results. Any changes which stem from this election aren’t going to come in overnight but as and when the market is impacted, go with the flow. If you need to change tactics or adapt your strategy, do so. If being a real estate entrepreneur is your dream, then follow it.
Remember, you are the captain of your ship. You are your own boss. This is your real estate business. You’re investing your money. Don’t dwell on who is the leader of the free world because at the end of the day it won’t stop you making a success of your real estate investment. Focus on the micro market, research your area, invest wisely, and go out and make some money.