In my last article, I explained how trends in neighborhoods and cities can affect real estate valuations which will ultimately affect your level of profit when investing in real estate. In this article I explain the next two levels of trends that you should be aware of.

The third level of trends that I want you to think about before investing your money is the national level. Is the population getting older or younger? If you are in a graying society like most of the wealthy nations, then real estate may decline without a good amount of immigration. Older people move into smaller living spaces or into retirement homes or with family who can care for them. If you are in an aging society, no matter what happens, real estate could become less of a scare commodity. If the new generation can’t populate all the homes then obviously home prices will go down. Even if your nation is aging, you can overcome this trend by going back to the second level and find a house in a city that is attracting many young people and keeping the area refreshed and revitalized. Furthermore, is the nations economy speeding up or slowing down? If things are speeding up and credit and money is expanding then investing in real estate is a wise thing to do. However, if there is a credit contraction, like what happened in the middle of 2008, then you can expect that things will be slowing down and not as many people will be investing in real estate as funds become more difficult to attain. If a nation is becoming a hot tourist destination or the economy is growing rapidly due to innovative new businesses, then the long-term trend should be upward.

The fourth level of trends that I want you to think about before you sink any cash into a real estate investment is the global level. You should have some idea of currency exchange rates before you even get started. If you don’t know anything about foreign exchange and currencies, then check out the richbitchitch.com articles on Forex trading. Why are currency exchange rates important? Well, if you live in an economy with a cheap currency, then you can expect that foreign investors will be moving in and scooping up properties. Those foreign investors usually have different tastes and desires and so you can expect that the areas and sectors that they are interested in will not necessarily be the same as the people of your country. An example can be seen in Florida. As the dollar has slumped against the Euro, a number of European investors have picked up condos and other properties in Miami and other cities, making it easier to unload real estate there than it has been in other parts of the United States where foreign investors have no interest. The other reason to be conscious of global trends is that if you can understand other foreign real estate markets it will give you an idea of what to expect in your home market, because no matter what your situation is in the local real estate market, chances are the same thing has happened somewhere on the planet, and if you can research it then you will be one step ahead of the game. Finally, the reason I suggest that you be aware of global trends of real estate is that sometimes the best place to park your money isn’t where you live but in another country with a cheap currency that has a growing number of tourists. If you expect the currency to increase in, say, Belize and the tourism to increase there, then you might make a larger profit by investing there than you would at home where the market may be slow. Of course, there are always markets at home that are profitable, but why limit yourself?

Written for Richbitchitch.com by Rick Hyland