Emerging Markets can be labeled as new growth markets or correcting markets from previous cycle down turns. There are several variables that are used to identify these markets including job growth patterns, population increases and future projections which are weighed in the ultimate decision process. Demographic variables are just one component in this complex evaluation process and are used in conjunction with a myriad of other instruments in measuring whether a market is truly emerging.
Emerging markets have historically produced higher than average returns over a three to seven year hold because the leading indicators have been steadily increasing, new jobs continue to increase, rental property availability is diminishing and rents are rising which increase our Net Operating Income.
Initially there is not as much competition for available properties because most people do not know the indicators of an emerging market. As the market begins to heat up, other investors enter the market which drives up higher sales pricing. This encourages appreciation. As the market begins to mature, we prepare to sell our property and exit the market. SMG then reinvests in larger property acquisitions in other emerging markets.
Southport Management Group, Inc. is dedicated to real estate investing for the protection and enhancement of investment capital. Our expertise in multifamily properties and our attention to management processes produce a solid company dedicated to quality and performance which results in successfully sound investments.