One of the fundamental rules of real estate investment is hang onto your anchor. Stick close to the anchors. Property with ocean view is one very solid anchor. When storm clouds gather over the real estate market, and everyone else is in a panic your anchor will hold. You’ll be safe and secure when others are driven onto the rocks.

Positive Anchors

Real estate trainer Todd Dotson defines an anchor as a feature or structure that solidifies the economy of any area. Think about some of the questions you asked the last time you bought a house? How far from the mall? How far from the school? People need certain services and don’t want to drive all over the place to get them? These are the anchors that you want to be close to. Bear in mind, however, that anchors vary with the neighborhood, which according to Dotson fall into three socio-economic categories.

Low Income Anchors

You want to avoid the “war zone.” That’s where you collect your rent with a bat. But one rung up from the war zone are the low income neighborhoods and these can be good to investors. These are the people who have been left behind in the inner city when the middle class flees to the suburbs. They rely heavily on the mom & pop grocery stores and the Laundromats. Other features of these areas are the universities and hospitals that were also left behind with the urban flight.

Stick within easy driving or walking distance of these sources of necessities in transitional areas that are being resurrected. The ratio of owner to renter in these areas may be as low as 20:80.

Moderate Income Anchors

As noted above the low-income areas are often targets for government assistance, whereas the moderate-income neighborhoods are fueled by blue-collar jobs. These can often pay quite well, so we are moving up a notch on the economic scale. Pride-of-ownership tends to contribute to the stability in an area and makes it even more attractive for investment, depending on your goals.

The owner-renter ratio in these areas is typically about 50-50. The greater stability in the area attracts some of the national franchises to serve the needs of the residents: stores like Walgreen’s, Rite-Aid, or McDonalds. These are your anchors.

Middle Income Anchors

Moving up another notch on the socio-economic scale we enter the upper-middle income community. Here we find retailers catering to the wants, not just the needs of the residents. You’ll find national chains like Outback Steakhouse, Barnes & Noble, and Starbucks catering to the wants, not always the need, of the residents. The ratio of owners to renters flip-flops to about 80:20.

The main thing to remember is that anchors are a key indicator as to whether or not a particular investment is likely to be profitable. Don’t stray too far from your anchors

Water As An Anchor: Property With Ocean View

There’s another kind of anchor that people don’t always think about. Water. For some almost mystical reason people are drawn to the water. That’s why property with ocean view is in high demand. Water can be calm, and placid, and peaceful. Or water can be wild, and tempestuous and threatening. Life and death mingle at its surface. Water is tantalizing. Property with ocean view allows people to experience the ocean vicariously.

Thus, it only makes sense to anchor real estate investments to water or property with ocean view whenever possible. Even marsh land is more appealing than dry land. If water is good, salt water is even better. Unfortunately, most people can’t afford an ocean front house or property with ocean view. But many can handle an ocean view condominium, especially with the rental income it generates.

Footnotes: Copyrighted information related to real estate anchors supplied by Todd Dotson Training Systems, Arlington, Texas (1-800-RE-DEALS. See also our article on negative anchors.

Oliver Woods is a real estate consultant offering some of the best deals available for residential and commercial investors today. Or he can help you locate the best price possible when selling your property through his nationwide home marketplace for sellers