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The Basics of Real Estate Investing - Understanding Public Transportation's Impact on Residential and Commercial Real Estate Markets

Posted on in Residential Real Estate

Naperville commercial real estate attorneysWhen a real estate investor wants to achieve a profitable return on investment (ROI), it is important that they consider a number of variables and factors related to the property. The projected growth of an area, which is arguably one of the most critical factors in this equation, can be extremely difficult to determine, as the economy and access to jobs can change dramatically over the course of just a few short years.

Information, recently released by the Environmental and Energy Study Institute (EESI), the National Association of Realtors (NAR), and the American Public Transportation (APTA), suggests that access to public transportation may be useful in determining both the immediate growth and future growth in a given area. Learn more about the intricate connection between public transportation and real estate growth, and discover how a seasoned Naperville real estate attorney can help to increase your chances of a positive ROI on your next real estate project.

Public Transportation's Effect on the Real Estate Market

Sarah Kline, Policy Director for Reconnecting America, a non-profit dedicated to integrating transportation and community development, discussed the idea of a “complete community” during a recent briefing on public transportation's impact on the real estate market. Particularly important to the millennial generation, these “complete communities” offer easy, convenient access to everything that a person needs to work, raise a family, and enjoy their life.

Millennials are also behind the “drive less, walk more” movement, and cities are listening. In fact, during 2012 alone, voters approved 49 out of 62 state and local ballots that included initiatives to raise taxes for transit and transit construction. The results have been astounding, thus far. Phoenix, which invested $1.7 billion into their public transit system between the years 2006 and 2011, had a $7 billion boost in economic development along their transit corridor. It now boasts more than 88,000 jobs per square mile inside the corridor, versus half that job concentration outside of it.

Data also shows that access to public transportation can improve a community's resiliency during an economic downturn. Across all five of the sectors examined by the study, The New Real Estate Mantra: Location Near Public Transportation, residential properties located adjacent to fixed-rail transit stations held their value far better than properties outside of the immediate corridor. Homes within a half-mile of the station also held their value better during economic downturns than homes outside of the half-mile area.

Using Transit Initiatives to Build a Stronger Real Estate Portfolio

In examining the data, the study showed that real estate investors are more likely to build a resilient, sustainable portfolio if they focus on developing in areas with transit initiatives. However, it is important for investors to understand that some of these communities may be presently disparaged. As such, the cost of improvement or repair should be carefully considered before making an investment. Due diligence, along with other important real estate tactics, should be used to determine the overall ROI on a specific property or community.

Contact Our Naperville Real Estate Lawyers

At Lindell & Tessitore, P.C., we work hard to protect the immediate and future interests of our clients. Seasoned and experienced, our Naperville real estate attorneys can handle the legal aspects of your next project to ensure you have the time and resources to focus on what is most important. Call 630-778-3818 and schedule you personalized consultation to get started today.

Sources:

https://www.eesi.org/briefings/view/the-impact-of-public-transportation-on-real-estate-values

http://www.reconnectingamerica.org/who-we-are/

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