How Infrastructure Improvements Boost Real Estate Activity

With Trump’s new 1.5 trillion dollar infrastructure plan, a multi-year action plan was set into motion. Lawmakers still have to agree on legislation by authorizing and funding different aspects of the program. Consequently, by improving infrastructure, real estate investment can increase considerably in communities. Infrastructure improvements almost always lead to a boost in real estate investment opportunities.

Infrastructure Improvement Leads to Investment Opportunities

This new infrastructure plan includes addressing roads, bridges, dams, waterways, and other public projects. There are investment opportunities in both the planning stages of the projects as well as after the implementation. These investment opportunities can look different. For example, bridge replacements can mean land transactions, since new bridges are usually next to the old ones. In these cases, it means that the government might need to acquire adjacent property. If roads need widening, then land might need to be condemned or purchased.

Real Estate Values Increase After Infrastructure Improvements

After infrastructure improvements, property values tend to go up. Public transportation improvements improve access to a community and to metropolitan areas, helping to attract new citizens. For example, northern Virginia expanded the metropolitan subway. Then, property values along the tracks quickly rose. There was a real estate boom with new condos, apartments, office buildings, and mixed-use projects springing up.

Infrastructure Improvement Is Important to Investors

The local community usually experiences a boost when new infrastructure projects come to a new location. These projects usually include new employment opportunities, stimulating the local economy and attracting more people.

Although the announcement of new infrastructure projects leads to a boost in real estate prices, sometimes it signals a false boom. For example, airport improvements and expansions lead to increased business and tourism opportunities. Although these improvements can be good for the local economy, they can have negative impacts on the surrounding community. The negative impacts might include increased noise, air pollution, and traffic effects.

Improved infrastructure usually has a positive effect on the surrounding community, but investors still need to be cautious. Investors who want to break into the new market need to carefully assess the community and the area before making any decisions.