Making profitable real estate investments requires information and careful analysis. Before making any investment decisions, there are many critical questions you must ask yourself and at least five key metrics you need to review.
1. Population Growth Rate
Of all the metrics that predict future market volatility, population growth is probably the most important. The housing requirement — single-family homes versus apartments versus something else — will vary based on the components of population growth, but ultimately, more residents equals more demand.
The trick is that you don’t necessarily want to invest in a top-10 location for population growth, as that may only be the case for the short-term. What we care most about is steady population growth over the long-term — it’s one of the core tenets of our investment criteria at our firm. Average to above-average population growth is fine as long as it follows a positive trajectory that is expected to continue for the foreseeable future.
You can see how this plays out in multifamily pricing, new construction, rental rates, etc., with every major market. Where there are either rapid or gradual declines in population, there is also stagnant to negative-performing multifamily assets.
2. Employment Growth Rate
The largest driver of rental demand is population growth and, in turn, one of the largest drivers of population growth is employment growth. When analyzing a market, you want to understand its job creation trends. Ask yourself:
• Is it a steady jobs market?
• Does it fluctuate at a greater rate than the overall economy?
• Over what period of time has it been stable?
• If the employment growth rate is more volatile than the overall economy, what forces are driving that?
In general, the larger the market, the more stable the employment growth because there are many job creators, i.e., existing and new businesses.
Three factors to keep in mind are:
1. Healthcare, government and higher education jobs rarely relocate and tend to grow over time.
2. Military jobs can fluctuate based on base realignments and deployments. Be cautious of markets where military is the bulk of employment growth.
3. Manufacturing and virtual service jobs can be volatile regardless of the economy.
3. Components Of Employment Growth
In addition to the overall employment growth numbers, you must also study where jobs are being created. For instance, how stable is the job source? Be cautious of service and retail jobs. What types of jobs are they: white-collar educated jobs, blue-collar trades or minimum wage? What age group is the dominant employment growth attracting? For instance, the 18-34-year-old demographic is the largest group that rents.
4. Unemployment Rate
Looking at unemployment and components of unemployment is different than employment growth. While not typical, you could have a market with rising employment growth with no corresponding impact on unemployment. This occurs when job creation demographics are different than the current unemployed base.
In general, you should look for a market where unemployment is less than the overall U.S. market. If there is a steady trend there, then most likely this specific market will be comparatively better than those with unemployment rates greater than the U.S. average or volatile.
5. Landlord/Tenant Laws
Multifamily investments sit in the middle of several different local and federal policy influences:
• Federal equal housing laws.
• Federal, state and local business practices.
• State and local landlord/tenant laws.
Since shelter is a basic human need, there are several voices impacting how and in what way a multifamily property is operated. This can impact your tax bill, your allowable marketing practices, required property living standards and the landlord’s and tenants’ rights.
Evictions can and will happen, even in new A-grade complexes. The percentage of evictions and bad debt activity increases as you move down from Class A properties to Class D. You want to be in a state that provides favorable or, at the very least, neutral treatment for the landlord in eviction and bad debt scenarios.
In relatively neutral landlord/tenant states, evictions usually take 30 to 45 days, and if a tenant breaks a lease, they are responsible for the economic harm caused to the landlord. However, in some states, it can take up to six months for evictions, and during that time there is no rental income or no recourse to the lost rental income.
Analyzing a multifamily investment market can be complex. Reviewing key metrics can help you evaluate the potential profitability and risks. Long-term, steady population growth and stable employment growth are indicators of a promising investment market. Moreover, a market where unemployment is lower than the overall U.S. market is more favorable. Neutral landlord/tenant states may reduce the loss incurred from evictions or unforeseen circumstances. A thorough analysis of all of these factors can help you make informed decisions.
Square Payment Volume Disappoints Amid Further Bitcoin Investment – CMC Markets
Square (NYSE: SQ) shares fell after hours as the company’s December-quarter financials beat analyst expectations but gross payment volume was slightly below estimates. The company is one of the fastest-growing fintechs in the world and has witnessed the popularity of its Cash App soar during COVID-19. In general, digital payment tech companies have been some of the biggest winners throughout the health crisis as they have made it easier for people and businesses to send and receive payments safely.
This article was originally written by MyWallSt. Read more market-beating insights from the MyWallSt team here.
Square’s fourth-quarter earnings
On Tuesday, the San Francisco-based company recorded better-than-expected Q4 results;
- Adjusted earnings of $0.32 per share, up 39% year-over-year (YoY), beating the Street’s estimate of $0.24.
- Revenues of $3.16 billion, up 141% YoY, smashed the consensus forecast of $3.11 billion.
- Gross profit of $804 million, up 52% YoY, beating forecasts of $801 million.
- Sales for its Seller system, which allows merchants to accept mobile card payments via a plastic dongle that’s inserted into a mobile phone, grew to $987 million.
- Subscription and services-based income climbed to $449 million, up 60% YoY.
Square’s gross payment volume falls short
Shareholders were disappointed with Square’s gross payment volume (GPV) of $32 billion for the quarter, which was up 12% YoY but still fell short of Wall Street’s prediction of $32.1 billion. Square’s GPV provides investors with an overall picture of transaction volumes and is the main gauge of the total dollar amount being transferred through its payment services. The higher the volume of payments tracked by GPV, the more transaction revenue Square can generate.
Square stated that revenue growth was driven by more people using the Cash App to buy and sell Bitcoin. The mobile payments company benefited hugely from the recent Bitcoin rally, helping Square generate $1.76 billion in profit. Excluding Bitcoin, Square’s total net revenue increased to $1.4 billion, meaning the company was heavily reliant on cryptocurrency transactions on its platform during the quarter.
During the earnings call, Square also disclosed that it had invested a further $170 million into Bitcoin in addition to its earlier $50 million purchase. This investment could provide the company with further income down the line, yet the worry for investors here is that financial regulators might begin to crack down on Bitcoin.
Square is growing its user base
Square shares have surged over 16% year-to-date as investors largely ignored the threat of small businesses closing during the pandemic and how this could affect the company. Instead, shareholders focused on the growth of the company’s Cash App and how the service could help people make payments safely during the pandemic. At the end of 2020, its Cash App had 36 million users, up from 30 million at the end of Q3.
Square’s revenue growth is benefiting from the shift to e-commerce and growing popularity for its digital cryptocurrency transaction services offered by its Cash App. Whether investors need to be worried about Square’s reliance on Bitcoin is still a concern for many. However, Bitcoin continues to receive legitimacy in the eyes of the financial world as more companies like Tesla invest in it. This might just be a play that could work in the company’s favor but is still one that investors are watching closely.
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Disclaimer Past performance is not a reliable indicator of future results.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.
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BTV Visits Thriving Companies to Invest In – Investing News Network
On national TV Sat. Feb 27 & Sun. Feb 28, 2021 – From mining to cryptocurrency this episode of BTV-Business Television visits exciting companies for your investment portfolio including:Cannot view this video? Visit: Preview: YouTube BTV Live Premiere 1pm PST today + Meet the Hosts of BTVClick here to set a reminder! Discover Companies to Invest InBIGG Digital Assets Inc. – As cryptocurrency grows in popularity, BTV …
On national TV Sat. Feb 27 & Sun. Feb 28, 2021 – From mining to cryptocurrency this episode of BTV-Business Television visits exciting companies for your investment portfolio including:
Cannot view this video? Visit:
Sneak Preview: YouTube BTV Live Premiere 1pm PST today
+ Meet the Hosts of BTV
Click here to set a reminder!
Discover Companies to Invest In
BIGG Digital Assets Inc. (CSE: BIGG) (OTCQB: BBKCF) – As cryptocurrency grows in popularity, BTV finds a company dedicated to creating a safer, more accessible crypto environment. Adelaide Capital’s Victoria Rutherford weighs in.
Talisker Resources Ltd. (TSX: TSK) (OTCQX: TSKFF) – BTV discovers how this junior resource company is fast tracking its historic gold mine in B.C. towards production.
Blockchain Foundry Inc. (CSE: BCFN) – A company at the forefront of blockchain technology development. BTV learns about Syscoin, their blockchain protocol.
Moneta Porcupine Mines Inc. (TSX: ME) – Their recent acquisition increased their land position to create one of the largest undeveloped gold projects in North America.
Sernova Corp. (TSXV: SVA) (OTCQB: SEOVF) – A regenerative medicine therapeutics company with a new approach to treating chronic diseases including Type 1 Diabetes.
Monarch Mining Corporation (TSX: GBAR) – BTV visits this gold focused company with plans to restart the Beaufor Mine in Quebec’s prolific Abitibi Greenstone Belt.
On air for over 20 years, BTV – Business Television, a half-hour investment TV show, features analysts and emerging companies on location. With Hosts, Taylor Thoen and Jessica Katrichak, BTV brings viewers investment opportunities.
TV BROADCAST NETWORKS and TIMES:
BNN Bloomberg – Saturday Feb 27 @ 8:00pm EST, Sunday Feb 28 @ 4:30pm EST
Bell Express Vu – Saturday Feb 27 @ 8:00pm EST, Sunday Feb 28 @ 4:30pm EST
US National TV:
Biz Television Network – Sun Mar 7 @ 8:30am EST
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/75445
News Provided by Newsfile via QuoteMedia
Temasek Makes Rare Seed Investment in Plant-Based Chicken Maker – BNN
(Bloomberg) — Plant-based chicken maker Next Gen Foods has closed a $10 million seed round co-led by Temasek International, a rare early-stage bet by Singapore’s state-owned investor.
The funding round was also backed by family office K3 Ventures, the Economic Development Board of Singapore’s New Ventures unit and NX-Food, a startup hub owned by Germany’s Metro AG. The investors will help fund a regional expansion as Next Gen prepares to start selling to Singapore restaurants from March 18.
The deal is a sign that Temasek, which manages S$306 billion ($232 billion) and also backs plant-based beef rival Impossible Foods, is ramping up deals in the alternative protein space as Singapore attempts to secure 30% of its food locally by 2030. While the firm’s subsidiaries like Vertex Venture Holdings have previously invested in seed funding rounds, the parent company has traditionally backed more mature businesses at the Series A level and beyond.
Next Gen was co-founded by Timo Recker, whose family has long worked in pork production. He wanted to move away from meats and in 2013 used his industrial know-how and some family capital to launch LikeMeat, which sells currywursts, schnitzels and other products made of soy and peas.
Recker sold control of that business last year and launched Next Gen in Singapore. It uses suppliers in the Netherlands to produce soy-based chicken pieces with “lipi,” a trademarked mix of plant-based ingredients it says imparts a chicken-like taste in the same way heme boosts the realism of Impossible Foods’ fake-beef burgers. The product will be sold under the brand name Tindle.
But where Impossible Foods’ heme features genetically engineered soy – forcing it to gain regulatory approval before entering some markets – Next Gen uses natural ingredients. For K3 Ventures Chief Executive Officer Meng Xiong Kuok, that was an important factor in making the investment.
“Building up their capabilities based on non-GMO soybeans helps guarantee and set the foundations for their potential entry into the China market,” he said.
Singapore is positioning itself as a global hub for alternative protein development and production. It recently became the first country to approve the sale of cell-based chicken via Eat Just Inc. and is home to Shiok Meats – a producer of lab-grown prawn meat.
The backing of institutional investors won’t guarantee success, with startups and conglomerates around the world working on plant-based meat products. The segment is expected by UBS Group AG to be worth more than $51 billion by 2025, or about 2.5% of the overall meat market.
Next Gen outsources the manufacturing of its products and will initially sell through restaurants instead of direct to consumers. To prevent partners from replicating their recipe, contractors produce different components before it’s assembled into the final product. Its Netherlands-based partner can produce 5,000 tons annually, enough for 9,000 restaurants, and Recker predicts this capacity will be enough to last two to three years.
“We’re building now our teams and will then scale the brand globally,” he said. “We want to become the undisputed leader for plant-based chicken.”
©2021 Bloomberg L.P.
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