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How to spot a gentrifying neighborhood
Similar to the stock market, investors love to know which neighborhood is going to be the next big thing. So how do you catch these neighborhoods before they flourish and their property values go up substantially!? For some investors, it’s not as difficult as you might think.
Broker Rhys Wyn Trenhaile of The Vanguard Team at Manor Realty Ltd. said his team has a bunch of investors that have been around a long time and don’t look at math and predictive models too much, but rather rely on observational evidence. “I think the greatest rule of thumb I’ve ever seen is following where three particular demographics are going to live. If you see artists, hipsters, and gay couples moving to a neighborhood, it is extremely likely this is your next neighborhood on the rise.”
According to Trenhaile, these demographics tend to be the first ones into a new neighborhood as they tend to be younger and need to find cheaper real estate.
“They are also very creative and full of energy,” he says. “They redevelop these properties with their ideas and their visions.
Current examples of this in Windsor are the downtown area and Ford City, as young entrepreneurs have begun to heavily populate the neighborhoods.
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This usually ends up increasing properly values as the next demographic to populate the area typically are young professionals.
Trenhaile says they want to be around the “cool kids” and move into these neighborhoods, thus driving up demand for real estate as well as the prices. “From there they often get married, have kids, and don’t want to leave the neighborhood, further increasing the desirability and property values. Ironically to a point where the artists and hipsters can no longer afford the neighborhood and move on to the next one to repeat the process.” In bigger cities you can see this happening over time, including right across the river in Detroit.
Corktown and Indian Village on both sides of downtown Detroit are currently two of the happening neighborhoods on their way to gentrification. “I realize some people see gentrification as a bad word,” says Trenhaile. “But I see nothing wrong with the reinvention and re-emergence of tired and old neighborhoods in cities. Without this cycle we wouldn’t have the thriving cities that we have today. Speak to a member of the Vanguard Team at Manor Realty Ltd. (519) 250-8800 for more information on this phenomenon as it relates to Windsor, or visit thevanguardteam.com.
As well, if you would like to learn more about how gentrification can impact the mortgage process, click the link below for a free strategy call with our team at LendCity.