In most US cities, real estate prices have returned to their 2006-07 level. But opportunities still exist for investors looking for a strong rental return.

Denver is the American city that has experienced the largest influx of workers in the last twelve months: 706,000 people looking for a job have settled there. At the same time, the average home price in Denver jumped 11.5 per cent during this period to $441,500.

In the United States, the real estate market is spread everywhere. The price of more than half of the homes now exceeds their pre-crisis level. The real estate crisis caused by subprimes, these questionable mortgages granted to poor households to gain ownership, is indeed over in the United States.

The recovery in the real estate market is mainly due to the strength of the job market.

A strong market

In twenty-one of the top thirty-five US cities, prices are reaching a historic high, reveals a study of the real estate site Zillow. And in seven major cities (Dallas, Seattle, Denver, San Antonio, San Jose, Austin and Portland), the price of over 95% of housing is above the peak of 2006-2007.

For the 12 months, the average price of a home in the United States has increased by 8.3% to $217,300. This is 8.4% above the previous peak. Beware, some cities remain devastated though: in Las Vegas for example, less than 1% of homes have regained their pre-crisis value.

While interest rates have begun to rise in the United States, they remain at a favorable level: an average person can borrow at 4.5% over thirty years. For now, the slow rise in interest rates has had no impact on the property market. Another driver of the increase in price is the decrease in the stock of homes for sale, which contracted 4.8% last year. But it is mainly the strength of the job market that explains the rebound in the real estate market. In May the US unemployment rate fell below 4% of the labor force, a level not seen for decades.

Like Denver, other lesser known cities remain accessible and much more profitable like Nashville (Tennessee), Oklahoma City (Oklahoma) or San Antonio, Dallas, Houston and Austin (Texas), even San Diego (California)

In the United States however, there is a close link between the labor market and the real estate market. According to the Bureau of Labor Statistics, a US citizen changes jobs on average every four years. According to a study by the National Association of Realtors compiling data from Linkedin, Denver is the American city that has seen the largest influx of workers in the last twelve months: 706,000 people looking for a job would have settled there.

Meanwhile, the average home price in Denver jumped 11.5% during this period to $441,500. In the capital of Colorado, the median value of a home reaches $397,700, 65% above its peak in 2006-2007, and 99% of homes are worth more than at the time of the housing bubble!

If rates remain accessible, many Americans will be unable to borrow, which is why rental demand remains strong.

Be selective

New York, San Francisco or Miami – the favorite cities of Europeans in the United States – now seem too expensive to allow an investor to obtain an attractive rental return. At best you can expect a gross yield of 5% in these cities. In New York for example, it is difficult to have better than a big studio if your budget is between 500,000 and a million dollars. For a two-bedroom apartment, you need more than a million dollars, and you will not be in Manhattan!

In contrast like Denver, other lesser-known cities remain accessible and significantly more profitable like Nashville (Tennessee), Oklahoma City (Oklahoma), Atlanta (Georgia), San Antonio, Dallas, Houston and Austin (Texas) or San Diego (California). These cities are all the more interesting because the rents have increased much less than the purchase price: it is therefore crucial not to buy too much to obtain a satisfactory rental return. In Dallas a very large house in perfect condition sells between $180,000 $250,000 and yields between 5% and 6% annual yield.

Rents which have increased by only 1.3% in median value in the last 12 months should continue their catch-up, because the rental demand is strong in the United States. But if rates remain accessible and the subprime crisis is over, many Americans will remain unable to borrow. Owners whose property has been seized by a bank can not apply for new credit until at least seven years have passed. Likewise most students who have taken out a student loan to finance their education cannot buy a home until they have finished repaying their loan.

The same is true for those who have fallen into the trap of revolving credit cards. This explains why the average age of first-time buyers in the United States now exceeds 35 years. For those who plan to buy a property to rent it, this is a favorable situation, as it will take many years for these tenants to become homeowners.

Get good advice

What advice to give to those who are considering investing in the United States?

It must be remembered that an owner can evict any unscrupulous tenant in less than a month, but it must however return the property in perfect condition between two occupants, which has a cost. Another American specificity is that some homeowners’ associations can set binding rules. For example they can prohibit short-term rental, or even visiting children or young adults. In many buildings, it is possible to rent an apartment only once every twelve months. The foreign buyer has an interest in carefully reading the rules of the condominium before committing.

If you are interested in purchasing real estate in one of the most affordable cities like Chicago, consult a specialist like Kale Realty. There are opportunities but risks as well, and if you are investing from abroad you need a local broker well aware of all local angles and aspects to consider.

I was asked to speak tonight at the Goodman School of Business at Brock University about how to succeed in business. It does not feel like long ago that I was a student at Brock attending a similar talk, with business professionals telling us how they built their career and what we would need to do to succeed after graduation.

I remember feeling overwhelmed at the time thinking of the long road ahead to find a career that inspired and fulfilled me. I remember that I wanted it to just start now! I now reflect on how lucky I was to have carved out a career that truly excites me and inspires me every day, and what I might tell this group tonight about my story that will help them.

I was asked to outline what I do (sometimes still figuring that out), and how it was that I got this point with my business.

Digital marketing has evolved since I graduated University in 1998, in fact, “digital” was not even part of the marketing mix according to my textbooks. All of my training in marketing online has been on the job, and real world trial and error. Online usage has exploded over the past decade, and access to WIFI and mobile devices have completely changed consumer buying behaviour.

I wonder now how the world will change over the next decade for the group I am speaking to tonight?

My experience in building websites and marketing online began when I was hired as a Marketing assistant for the Marriott Fallsview Hotel in Niagara Falls, Ontario. I worked for the ownership group, and became the Director of Marketing Communications over an 8-year time period. I was empowered throughout my time there to try new things, and so I did.

Hotel chains did not want us developing our own websites, and at the time hotels were relying heavily on the brands and the intermediaries to sell rooms online for them. Direct to consumer digital marketing through tactics such as paid search and organic search engine distribution was so new and foreign, and quite frankly there was no place to get formal training.

My experience in digital marketing began in understanding search engines, and how to ensure that a website could be found by target consumers. Equally important was to understand how a website would lead to online conversions as consumer usage of the internet, as a means to research and buy online.

Marketers must now understand concepts such as; Social media marketing, mobile marketing, web analytics and measurement, consumer user behaviour – as well as search engine optimization, and web usability in researching and buying online.

The marketing mix has never been as complicated and more fragmented.

We have always been known for our focus on education and training for marketers both senior and junior, who need to understand this new and complex media mix. Our conference, Online Revealed now in its 8th year, has become the leading conference in the Canadian tourism industry for travel and tourism professionals to learn about digital marketing trends and best practices bringing together industry professionals from leading Canadian hotels, hotel groups, destinations, attractions and other travel suppliers, along with experts from industry giants such as Facebook, Google, Tripadvisor and Expedia to bring marketing professionals hands on knowledge and training.

How did I get here?

Throughout my career I have continuously learned about my industry, engaged in debate and conversation with my colleagues, attended conferences, and read about digital marketing and people doing innovative things. Today we have access to learning all around us with social media channels like LinkedIn and Twitter, and Blogs written by real people with real experiences.

The key is to understand consumers, keep a few steps ahead of consumer trends, understand why they buy, and most importantly what makes them buy. That is one thing that has never changed for marketers.

In addition, learn from the experiences of others. This is key.

What is also key is people. Especially in this age of texting, emailing and social media. I am one of the most digitally connected person there is, and yet I still pick up the phone, go to lunch, and travel to visit clients and colleagues. Face to face communication and relationships are more important than ever.

I think that I might focus my advice tonight around a few things in particular that have helped me get here.

1. Hard work and commitment.

Sounds passé, but the hard work and commitment continues throughout your career.

2. Relationships are key.

It is all about the people you work with and do business with.

3. Continuous learning.

You are never really done learning, and if you think you are, then you are wrong. Read, talk to colleagues, attend seminars and talks that inspire you. It is not all about degrees, diplomas or certifications (although these don’t hurt either), it’s about a commitment to continued learning.

and finally….

It’s not about finding “the next big thing” it’s about finding “your thing.”

I am an enthusiast of many things. Although I can appreciate a fine wine, and perhaps even describe the ‘nose’ of a good chardonnay – I dare say that I could lead a wine tasting session, or describe the process of oak aging or barrel fermenting.

I would say however that I am both an “enthusiast” and a “strategist” of Social Media. (and perhaps an evangelist and even a connoisseur of a good tweet).

Social media is as most would agree the new ‘medium’ in digital marketing. There are many out there trying to decipher how to…how much…and where to start in creating a social media “strategy” to attract a target consumer to engage and transact.

There lies the difference between a social media ‘Enthusiast” and a social media “Strategist” – it’s in the strategy (not just in the enthusiasm!) Wow – so that’s not rocket science!

Allow me to explain.

We must begin with what constitutes a good Social Media strategy.

1. Develop a good plan.

Sounds simple enough right? Start with who you are trying to reach and what social media channels they are likely frequenting. Decide what you are trying to achieve (ie. traffic back to a website, building an email database, an increase in brand awareness etc), chose the correct channels to populate (Facebook, Twitter, YouTube, LinkedIn, Flickr or all of the above), populate with content and build a community of followers.

Once you have decided on what social channels to include in your campaign, develop a plan to build a community – with an editorial or content strategy to support your goals.

For example: If you are primarily going to use viral video’s with the goal of driving traffic to a transaction – make sure that the YouTube channel you create has many points of reference and links back to your website.

Make sure that you have optimized your video’s properly to be found in search engines – and have populated other places with the video (like your website and Facebook page) and that you have added social media sharing tools to encourage more pass along distribution.

Also – ensure that all of your campaign elements are integrated and talk to each other.

2. Ensure that you have enough of a budget…

…and resources (time, expertise, dollars) to not only plan, but execute the strategy.

This is the tricky part. How do I know what resources I will need after the campaign ‘shelf life’ is up?

Social Media channels like a Twitter account for example typically do not exist in isolation. Typically, a Tweeter is representing a brand voice, or has a Blog associated with it – or a transactional website in which to drive traffic to.

If you are going to engage in social media marketing, you should plan for it to be part of your long term marketing strategy.

3. Measure and assign key performance measurables

Use social monitoring tools (there are many) as well as website tracking tools like Google Analytics to see how the campaign has impacted your campaign goals. Is Facebook now a top referrer of traffic to your website after launching an aggressive Facebook brand page?

How has the time and resources spent on Twitter affected the traffic increases in traffic to your company Blog?

4. Learn and Continue Building

This is a key point as many social media ‘enthusiasts’ may not pay enough attention to the fact that the foundation built in the beginning stages has a big impact on future social media successes. An isolated brand Twitter page with no integration into any other parts of a company’s marketing mix – no matter how many followers it has – will not result in long term success.

In addition, those who live in the social communities such as Facebook, Twiiter and beyond expect transparency, commitment, and for you to add value to the social media ecosystem.

A one off viral video campaign will most likely not work to create any spectacular results without a long-term plan about how to leverage the traffic it has generated, or to engage that audience enough to act.

Social media enthusiasts are passionate about what social media can do – and they make excellent community manager’s and community developers. Just because an enthusiast has a large list of followers on Twitter does not necessarily mean that they can map out a good long-term strategy and help guide the set up and execution of a successful social media marketing campaign.

Always engage with a true Social Media Strategist – one that has proven case studies and speaks to the points above if you are looking for a long term or even short term results…it will pay off in achieving brand ‘mavens’ and not just ‘followers’ who you may never see again.

If you are a connoisseur of a good discussion about social media marketing…I invite you to RT (Re-Tweet) this blog post and share your idea’s of what it takes to be a true strategist.