Always Invest Near Real Estate Anchors, Especially Property With Ocean View


Real estate anchors may be positive or negative, and property with ocean view is one of the strongest in the positive category. The first rule of real estate investing is to stick close to the positive anchors, so you’re not blown away in an economic storm. Hang onto your anchor.

Positive Anchors

What is an anchor anyway? Real estate coach Todd Dotson defines it simply as a feature or structure that solidifies the economy of an area. The anchors are “where it’s happenin'” The economic and cultural lifeblood of a community flows through the anchors. People rely on the anchors to supply their various needs — physical, social, emotional, spiritual. When buying a home they try to locate central to the anchors. Think hard about that when you’re looking for an investment property. Anchors are different though, corresponding to the socio-economic level of the neighborhood. Dotson identifies three levels:

Low Income Anchors

Urban flight leaves a preponderance of low income families in aging neighborhoods. These are usually renters who look to Laundromats, convenience stores, and pawn shops for basic necessities. These are your anchors along with hospitals and universities that have been left behind in the inner city.

Stick within easy driving or walking distance of these sources of necessities in transitional areas that are being resurrected. The ratio of owner to renter in these areas may be as low as 20:80.

Moderate Income Anchors

One rung higher, people in the moderate income sectors typically derive that income from blue collar jobs. By contrast, government assistance often fuels the low-income neighborhoods. Blue-Collar jobs often pay well, which lends stability to the moderate income area and makes them a more desirable investment target.

The owner-renter ratio in the moderate-income area hovers around 50-50, which makes the area attractive for both landlord and rehabber. These neighborhoods are anchored by national chains like Rite-Aid, McDonalds, or Walgreens, that are attracted by the relative stability of the area.
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Middle Income Anchors

Still higher on the socio-economic scale is the upper-middle income neighborhood, where home ownership may rise to 80%. These areas attract retailers who supply the wants, not just the needs of the community. This includes national chains like Starbucks, Barnes & Noble and Outback Steakhouse.

The main thing to remember is that anchors are a key indicator as to whether or not a particular investment is likely to be profitable. Don’t stray too far from your anchors

Water As An Anchor: Property With Ocean View

There’s another kind of anchor that people don’t always think about. Water. For some almost mystical reason people are drawn to the water. That’s why property with ocean view is in high demand. Water can be calm, and placid, and peaceful. Or water can be wild, and tempestuous and threatening. Life and death mingle at its surface. Water is tantalizing. Property with ocean view allows people to experience the ocean vicariously.

Thus, the savvy investor will always keep an eye open for water. Even marshland is better than a desert and a home with a pool usually commands more value, for the right person. All else being equal, salt water is preferable to fresh water, the ocean having its own special mystique. A home on property with ocean view may not be affordable for many, but a villa or condominium may be an economical alternative. Especially if you look for something in a resort community, where rental income during the summer can sustain the property.

Footnotes: Copyrighted material in this article is provided courtesy of Todd Dotson Training Systems, Arlington, Texas (1-800-RE-DEALS). This article is one of a two-part series on positive and negative real estate anchors.

Oliver Woods is a real estate advisor who can help you to get the best price possible in the present market if you have been struggling to sell your property — sellers may apply at his website. He also specializes in locating the best deals for residential and commercial investors who are searching for bargains in low price properties.