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The Secret to Successful Real Estate Investing in Heavily Regulated Markets

19 Jun 2023 · 1 min

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Speaker (Mark Simpson) argues that heavily regulated real estate markets can be attractive to investors who are willing to do thorough due diligence. He uses the example of short-term rental (STR) permitting — requiring new septic installation and a multi-month (about three months) local and state permitting process — as a barrier to entry that deters less-diligent competitors; once inside, regulated markets tend to be stronger and more stable.

Questions this video answers

About three months to go through local and state permitting.

A short-term rental (STR) permit.

Chapters

It's tough to get an STR permit. And, like, I've got to put in a new septic tank, and it's going to take me three months to go through permitting at a local level and a state level, which doesn't happen in most states. But that's the barrier to entry. Right. That keeps a lot of people out that don't want to do that work. So I look at investing in the heavily regulated markets. One, because they have a history, it's not going to change dramatically. But two, it keeps the week out. So if you're a strong person that is willing to do the due diligence, jump through those hoops to be able to get into a highly regulated market, it's typically stronger once you get inside of it. So that's a strategy that I think people that are willing to do the due diligence should be looking at moving forward.