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Should I Invest in an Up-and-Coming Area?

The real estate market has gone a bit bonkers in the last twelve months. Since the onset of COVID-19, analysts have been anticipating a real estate crash, but the opposite has been true. Real estate prices are high, and they show no signs of getting lower in the near future.

Many areas have seen a spread from city centres into more rural areas, but many new investors have contacted us to ask about up-and-coming areas. So, we decided to lay out our research and opinions here for all to see!

What is an up-and-coming area?

This is a common term meaning any location that has shown a slow increase in home prices. These areas usually have one or two things going for them, but they're not the whole package. For example, they may be in a good spot for a commute to downtown, but crime in the area is still relatively high compared to the locations where real estate prices are higher.

Put simply, if you are considering an up-and-coming area, you'll get a lower cost of investment, but you'll have to give up some kind of amenity.

The Pros Of An Up-And-Coming Area

  • Lower cost upfront

  • Bigger return on investment when selling/ renting

  • Ability to renovate due to lower costs upfront

  • Social investment (you are helping improve a neighbourhood that needs help)

The Cons Of An Up-And-Coming Neighborhood

  • It may be harder to find tenants/ buyers without holding the property for some time.

  • Potentially fewer amenities (grocery stores, good schools, parks, etc.)

How To Decide

  1. Look to the local planning committee for commercial real estate deals in the area. Are there plans to build any new retail spaces or office buildings? Are there any new real estate developments planned? These are excellent ways of recognizing an up-and-coming solid neighbourhood.

  2. What's the walking situation in that area? If the crime rate is high enough that people do not feel safe walking around in the middle of the day, that's a huge red flag. The neighbourhood is not moving up fast enough for us to recommend an investment.

  3. Are there any franchises in the area? Coffee shops (like Starbucks, but not JUST Starbucks) are a good sign. Franchise stores do a ton of research before investing in an area. If there's more than one franchise, that's an excellent sign.

  4. Are there several local businesses? Local businesses have a strong investment in the community and will help to make a difference by cleaning up their neighbourhood. Local businesses promote community and often indicate the growth of a neighbourhood.

  5. Get in touch with an expert! That's us! Contact us, and we can chat about your goals, the locations that interest you, and the options you have for investing. We coach many first-time investors; we know our stuff and, as an added bonus: we are really fun to work with! So, let chat soon: Click to set up a consultation


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