Real Estate Investing Transportation Considerations
Hello everyone, it's been quite a year already and 2013 was pretty interesting for Ohio real estate investors. It would seem that the days of really deep discounts of 15% - 20% have dried up, though there are still great deals to be had. More investors these days are flipping less and choosing to "buy hold and rent" as real estate prices continue to rise.
Now, a real estate investment should be able to perform in any market, my business partner Greg Hancock will testify to that (he has a lot of posts on here) and together we buy and sell a lot of homes and real estate in Southwest Ohio and a good chunk of our business is working with investors.
This post I'd like to point out some concerns about highway construction and repairs as it appears that though the nations' economic downturn seems to be turning around for the better, the budget blues for transportation issues are just beginning. If you're a real estate investor and looking to buy, hold and rent out single family homes, or acquire commercial space for leasing and renting, one of the considerations of the are is transportation, which is often over looked.
The Federal Highway Trust Fund, which is paid for out of a $18.4 cent per gallon federal tax on gasoline will have evaporated by August 2014, this per the Congressional Budget Office. Translated, this literally means the gov't will run out of money for highway repair and construction. Ohio can still pay for pot hole repairs and other state endeavors, but the point is choose wisely with your investment strategies. Luckily, Interstate 75 projects are a head of schedule but the future of funding is as of yet, unclear, and for now, widening of Interstate 70 continues as well.
Ohio Department of Transportation spokesman, Steve Faulkner states the State works hard to make sure funds are available before spending it. “We typically have the money up front before we put shovels in the ground,” he said, “so the money is there.” In other words, no deficit spending allowed. Another concern are 1,200 jobs and homes of highway construction workers if the checks stop coming in. Major city areas that stand to be strongly impacted by this are Dayton, Cincinnati, Columbus, Cleveland, Toledo, Akron, Canton, Younsgstown and their immediate suburbs.
It's smart for real estate investors to buy (single family homes) in areas with diverse job markets and strong employers, and to not buy in neighborhoods on the decline, but rather in places showing improvement and growth. It's stands to reason that transportation can also be a factor in where people decide to rent, or where business decides to locate and lease space. If the commute time is lengthened because of bottle-neck traffic coming and going from home to work destination, or let's say an on or off ramp doesn't get finished it could make getting to a commercial space very inconvenient and otherwise interested parties are likely to pass it by.
Sources - Dayton Daily News