“Location, location, location” is a phrase often used in the real estate industry. It means that where you buy your property is where you will ultimately make money. While there are many locations in the United States that are known for having luxury real estate that will increase in value over time, not all markets in the country are created equal. Some markets will provide you with decent investment returns, while others will make you a millionaire.
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Who knows these markets best? Where will the next boom be? GOBankingRates spoke to several billionaire real estate agents to find out which U.S. housing markets they made their fortunes in.
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Bay Area
The San Francisco Bay area has become a gold mine for real estate agents, especially with its technology-driven economic growth and limited housing supply, according to Tim Choate, founder and CEO of RedAwning.
“This region has seen consistent increases in property values due to high demand and low inventory,” Choate said. “For example, when I first got into real estate investing in the early 2000s, the market was just beginning to feel the effects of the explosive growth of the technology sector.”
Investing in real estate near fast-growing tech hubs like Mountain View, Redwood City and Palo Alto has paid off handsomely for Choate, especially as companies like Google and Facebook have expanded their campuses and employees in those areas.
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Austin, Texas
“We first saw the potential in Austin about 10 years ago,” said Noah Guthart, COO and founder of Panacrypto.
Guthart observed that Texas’ capital city is growing rapidly with the new tech boom, attracting a new wave of young professionals eager to spend big salaries.
“It was all about good timing – we entered the market just as major tech companies were moving into the city,” agrees real estate agent and Big Ben CEO Ben Johnson, adding, “This brought an influx of high-paying jobs and created demand for housing.”
“Buying real estate in emerging areas before the tech boom allowed you to take advantage of the massive price appreciation,” Johnson says. “For example, properties purchased for around $300,000 in the early 2010s are now selling for over $700,000. A vibrant job market, great culture, and absolute affordability compared to other tech havens have made Austin a hotspot for real estate investment.”
“I’ve invested in several properties in the downtown area,” Guthart explains, “and one I bought for $300,000 in 2013 is now worth over $800,000. The combination of tech growth, a vibrant cultural scene, and a relatively low cost of living makes Austin a great place for real estate investment.”
“I remember a client who was hesitant to buy property in the emerging East Austin area,” Guthart says, “and I encouraged him to take the plunge. Within five years, the property value had doubled. Profits like these are what make a market like Austin so profitable.”
Charlotte, North Carolina
Seeing Charlotte’s rapid growth as a new financial center, with its unique political climate and blend of local businesses, Johnson decided to invest in both residential and commercial real estate. And it has paid off in a big way.
“The city’s population continues to grow, the cost of living is relatively affordable and it offers pretty good options for buyers and renters,” Johnson said.
Johnson recounted one memorable transaction: “I bought a downtown condo for $250,000 and sold it three years later for $400,000. This was all due to the surge in professionals and businesses relocating to the area. The strategic location and ongoing urban development made Charlotte a good market.”
Miami
“Miami was another gold mine for me,” Guthart said, highlighting the city’s international appeal, matched by its status as a financial, cultural and entertainment hub.
Guthart said Miami has consistently boosted real estate values.
“We’ve had great success, especially with luxury condominiums in areas like Brickell and South Beach.
“I once sold a condo in Brickell for $1.2 million, after buying it for $700,000 three years earlier,” Guthart says. “The timing was perfect, as Miami’s luxury housing market was booming with an influx of foreign investors, especially from Latin America. I believe Miami’s appeal will continue to grow and it will be a long-term investment hotspot.”
“One of my most memorable experiences was purchasing a waterfront property in Miami in 2015,” Guthart said. “We purchased it for $2 million and, after strategic renovation and marketing, sold it for $3.5 million just two years later. Due to the location and Miami’s growing popularity, this became a very profitable venture.”
Phoenix
When buying property in an area that seems more depressed than booming, timing as well as location can be important to boost value, as was the case for Johnson in Phoenix.
“…My timing coincided with the recovery after the recession at the beginning of the decade. The market was recovering, so prices were still low,” Johnson said.
“I bought in, which allowed me to invest in foreclosures and distressed properties at below market value,” Johnson says. “As the economy recovered and the population grew, property values soared.”
Johnson noted that in Phoenix, a foreclosure home sold for $150,000 within five years, a good example of the city’s resurgence as a real estate powerhouse.
“Phoenix’s warm climate, low cost of living and improving economic infrastructure make it more attractive,” Johnson added.
Nashville, Tennessee
Nashville is a city that takes pride in its music scene and Southern charm, but in Choate’s professional opinion, it has also experienced a real estate renaissance in recent years.
“I remember around 2015, when Nashville’s real estate market started to gain national attention,” Choate says, “I saw an opportunity in the downtown area, where historic homes and new development coexisted beautifully.
“RedAwning’s early investment in vacation rental properties has allowed us to capitalize on Nashville’s tourism boom and realize strong returns on our investment,” Choate said. “Nashville’s combination of cultural attractions and strategic urban development made it a standout market for our company.”
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This article originally appeared on GOBankingRates.com: Billionaire Realtors: 6 U.S. Housing Markets that Made Us Rich
