For many, real estate investment is as simple as locating a weakened area, fixing it up, and waiting for the prices to soar. Yet, Forbes explains, perhaps a more efficient method would be to locate the upper-crust neighborhoods, invest, and go to sleep at night knowing that no over-the-top renovation of the area would be necessary to make the investment worthwhile.
And, upon looking at the growth figures for some areas – including Miami Beach – it is no surprise why the latter of the two methods, while more expensive, is certainly more fruitful. While the areas are split into specific neighborhoods, for the sake of simplicity, we will refer to city only (you can get the complete detailed reports off the Forbes link below.)
New York, of course, is among the best areas (no surprise there), with a median home price of $2.45 million, good for 325 percent growth since 1990. Chicago is also a top area, with a median home price of $1.91 million, and 236-percent growth. Miami (Brickell area) has an average price of just $623,000, but the growth is an astounding 471 percent. And even Detroit, which has been slammed by declining population and dwindling job security, can claim a stake at the prize, with a $510,000 median home price in the Gross Point Park area, which has experienced a healthy 142 percent growth.
Of course, in terms of percentage growth, New York boasts a neighborhood (Riverside Drive and 149th Street) that has experienced 4391-percent growth; Los Angeles (between Ohio and Westgate Avenues) has seen 3081-percent growth; and Miami Beach (city center) has experienced 1532-percent growth.
When in doubt, it appears, go with the big-city investment.